Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

MESSAGE FROM THE QUEEN

ANSWER TO ADDRESS

The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's answer to the Address, as follows:

I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament.

Oral Answers to Questions — GERMANY

Nazi Victims (Compensation)

Captain Ryder: asked the Secretary of State for Foreign Affairs if he is satisfied that German compensation law is dealing with all categories of victims of Nazi aggression; and, in particular, that the claims of stateless persons are receiving the same priority.

The Joint Under-Secretary of State for Foreign Affairs (Mr. R. H. Turton): No, Sir. As the House has been informed, this matter has been the subject of representations to the Federal Government by the Allied High Commission. These representations will be the subject of official talks with the Federal Government which open next week. I shall keep my hon. and gallant Friend informed.

Captain Ryder: Will my hon. Friend also investigate the position of those members of the various underground movements, because information reaching me is that recent interpretation of the 1953 law appears to exclude them from any benefit?

Mr. Turton: Perhaps my hon. and gallant Friend will communicate with me on that subject.

Mr. Fernyhough: Will the hon. Gentleman impress on the Federal Government the anxiety of a number of people now residing in this country who have put in claims at the delay in dealing with their claims?

Mr. Turton: I think that if the hon. Gentleman refers to replies given by the Minister of State for Foreign Affairs, my right hon. Friend the Member for Melton (Mr. Nutting), on 21st July, he will see that the Government are fully alive to this problem and the difficulties and delays that have taken place. Talks are now proceeding.

Nazi and Anti-Semitic Propaganda

Mr. Janner: asked the Secretary of State for Foreign Affairs whether his attention has been drawn to the increasing Nazi and anti-Semitic propaganda in Western Germany and particularly to its use at a political meeting held in Berlin last week; and what action the occupying Powers are taking, in conjunction with the West German Government.

Mr. Turton: I am not aware of any increase in Nazi and anti-Semitic propaganda in the Federal Republic. Any such propaganda would be an offence under laws in force in the Federal Republic. As regards West Berlin, I would refer the hon. Member to the answer given to the hon. Member for South Ayrshire (Mr. Emrys Hughes) on 6th December.

Mr. Janner: Is not the hon. Gentleman aware that there was a very menacing mass rally in West Berlin recently, at which there were extreme exhibitions of all the bestiality of Nazism, and that a Minister of the Federal Republic spoke there? Will the hon. Gentleman try to do something to assist those who wish to crush neo-Nazism in West Germany, by sending a recommendation to the West German Government?

Mr. Turton: A better method of crushing it was the action taken by the House of Representatives in condemning the rally. Also, the votes of the electorate in the West Berlin elections meant that the party concerned got no seats in the Assembly.

Mr. G. R. Howard: Does not my hon. Friend agree that there are Germans who deplore this loathsome trait on the part


of a certain section of the German nation, and, if that is so, will he urge Chancellor Adenaeur to take such action as will reassure public opinion in this country?

Mr. Turton: My hon. Friend's supplementary question was answered by the West Berlin election results. Lt was shown that a very small minority of Germans believe in such methods, which are, in fact, contrary to the law and are prohibited.

Mr. Emrys Hughes: Is it not time that the Government faced up to the issue? Will not the Foreign Secretary get in touch with his friend, Dr. Adenaeur, and tell him that we regret the recrudescence of anti-Jewish propaganda?

Mr. Turton: As I said in the House last Monday, it is primarily a matter for the German Federal Government.

Mr. Emrys Hughes: It is a matter for the Foreign Secretary, too.

EUROPEAN COAL AND STEEL COMMUNITY

Mr. Marquand: asked the Secretary of State for Foreign Affairs whether he will make a statement about the new system of relations between the European Coal and Steel Community and the British coal and steel industries.

Mr. G. R. Strauss: asked the Secretary of State for Foreign Affairs whether he will make a statement about the negotiations that have been proceeding with the European Coal and Steel Community.

Mr. Hamilton: asked the Secretary of State for Foreign Affairs whether he will make a further statement on the closer association of the United Kingdom with the European Coal and Steel Community.

The Secretary of State for Foreign Affairs (Sir Anthony Eden): There have been discussions this week between my right hon. Friend the Minister of Housing and Local Government and Mr. D. P. Spierenburg, a member of the High Authority of the European Coal and Steel Community. A meeting of the Council of Ministers and the High Authority of the Community has been held concurrently in Luxembourg.
Agreement has been reached on all the main points. Certain minor textual matters remain to be settled and Mr. Spierenburg is waiting in London for this purpose. It is hoped that signature of the agreement will take place in London in the very near future. I will then make a full statement to the House, and the text of the agreement will be published as a White Paper.

Mr. Marquand: Is the right hon. Gentleman aware that on the Advisory Committee which we have had connecting ourselves hitherto with the Coal and Steel Community, the workers—blastfurnacemen and steelworkers—of this country have been represented, and will he bear in mind the necessity of ensuring worker representation on any organisation that is set up?

Sir A. Eden: I am much obliged to the hon. Gentleman for making that point.

Mr. G. R. Strauss: As the agreement will presumably bind the iron and steel industry and the coal industry of this country in many ways, which may be desirable or not, and is now a matter of great importance, will the House have an opportunity of considering it at an early stage, before we are finally committed?

Sir A. Eden: Yes, Sir. That is why I pointed out particularly that I will not only make a statement but also publish immediately a White Paper to enable the House to pronounce on these arrangements. I think that the right hon. Gentleman can be assured that the position is not perhaps quite so definite as he stated.

Mr. Hamilton: In view of the firm promise that this might appear to hold, can the right hon. Gentleman say what preparatory or exploratory steps, if any, have been taken by the Government to inaugurate similar schemes dealing with transport and power?

Sir A. Eden: This is a particular problem, as the hon. Gentleman knows, which has to be resolved in respect of this Authority, and if he wants to raise another issue perhaps he would be kind enough to put down a Question.

Mr. Ellis Smith: Is the right hon. Gentleman aware that some of the trade unions mostly affected by this are very concerned about it?

Sir A. Eden: I think that "this" has to be explained before anyone need be either concerned or unconcerned. I undertake to give the House the fullest information as soon as the agreement is signed.

BOMBED BRITISH STEAMER (COMPENSATION CLAIM)

Lieut.-Colonel Lipton: asked the Secretary of State for Foreign Affairs whether the Government of Guatemala have now settled the claim for compensation in respect of the bombing of the British steamer, ss. "Springfjord," on 27th June last.

Mr. Turton: The preparation of the claim by the various interested parties is not yet complete, but as soon as it is ready Her Majesty's Government will raise the matter with the Guatemalan authorities.

Lieut.-Colonel Lipton: Bearing in mind that compensation has already been paid in respect of the airliner which was shot down in the China Sea a month later than the date on which this ship was bombed, will the hon. Gentleman explain why, in South America, this Government appears to be so flabby in protecting British interests? Is he further aware that the Government have become very unpopular with Lloyds?

Mr. Turton: The answer is that we are not responsible for the preparation of the claim in this case. The parties who are responsible have to take some time on the preparation of a claim, and legal gentlemen do take a long time over these matters.

ATHENS RADIO (CYPRUS BROADCASTS)

Mr. G. Longden: asked the Secretary of State for Foreign Affairs whether he is aware that, in spite of the protests made by Her Majesty's Government to the Greek Government, the Athens radio continues to make subversive broadcasts to Cyprus and what further action he proposes to take.

Sir Anthony Eden: Yes, Sir. I am arranging for a translated extract of these broadcasts to be circulated in the

OFFICIAL REPORT. Her Majesty's Ambassador at Athens has again protested to the Greek Government against this hostile propaganda, and has received an assurance that offensive matter will not in future be included in the broadcasts. The position is being carefully watched.

Mr. Longden: While welcoming my right hon. Friend's reply, may I ask whether he does not think that the time has now come when the contents of these broadcasts, branding, as they do, Cypriots who co-operate with us in the working of the new Constitution, and denouncing them as traitors, should be made known to a wider public even than this House? What are the Government doing to counter the effects of these broadcasts in Cyprus and to give the Cypriots the classical warning against reliance on Greeks bearing gifts?

Sir A. Eden: I am bound to say that some of this propaganda, certainly the language accusing those who, after all, are working with a fellow N.A.T.O. Power, of being traitors, is something which should not be followed by any so-called friendly Government. As to the second part of my hon. Friend's supplementary question, I understand that the radio station in Cyprus is putting out its own messages. Perhaps my right hon. Friend the Colonial Secretary can give my hon. Friend more information about that.

Following is the translated extract from a broadcast by Athens Radio on 16th November, 1954:
Another form of sheer hypocrisy on the part of the present British rulers is in that their weightiest argument has been that if Cyprus were given to Greece she would run the risk of falling into the hands of the Communists. Yet, today, except for a few well-known traitors, they can find no Greek who is prepared to co-operate with them for the new Constitution, and are spending lavishly to buy the co-operation of certain Communists to this end.
Greek Cypriots, be very careful. Stigmatise relentlessly all the renegades. Whoever cooperates in any way in the imposition of the Constitution on Cyprus, and not for the freedom of Cyprus, is unworthy of the name of Greek. He is but a traitor to his country. People of Cyprus, the British cannot impose a Constitution, because to implement it they need traitors, and except for five or 10 stigmatised renegades, they cannot find any.

N.A.T.O. (OIL SUPPLY)

Mr. Page: asked the Secretary of State for Foreign Affairs whether he is satisfied that the tanker fleet available for operating between the Middle East and European ports is of sufficient tonnage to maintain a supply of oil to North Atlantic Treaty Organisation forces adequate to maintain, in emergency, the defence measures planned by that organisation.

Mr. Turton: On the information at present available to me, I have no reason to suppose that the supply of oil for the essential needs of North Atlantic Treaty Organisation forces in Europe will be restricted by shortage of tankers.

Mr. Page: Has my hon. Friend some figures to show the number of tankers that are available under the flags of the N.A.T.O. countries? Has he any evidence to show that there is any serious transfer of tankers from N.A.T.O. countries to non-N.A.T.O. countries which might cause a depletion of available tanker tonnage in the event of an emergency?

Mr. Turton: I cannot go in detail into N.A.T.O. plans. My hon. Friend's Question is directed to what would be the position in war, and that seems to me highly speculative. I have done my best to reply to it.

TERRITORIAL WATERS (THREE-MILE LIMIT)

Mr. Usborne: asked the Secretary of State for Foreign Affairs with what countries the United Kingdom has concluded agreements limiting their territorial waters to three miles; and what steps he is taking to obtain the concurrence of all maritime States to the establishment of the three-mile limit universally.

Sir Anthony Eden: The limitation of territorial waters has not been the subject of formal agreement between Her Majesty's Government and any other State. Her Majesty's Government regard the three-mile limit as sanctioned in international law by long usage and custom. Her Majesty's Government have accordingly always refused to accept in principle claims to territorial

waters of more than three miles, and have reserved the right to uphold any British interests prejudiced by such claims.
As regards the second part of the Question, Her Majesty's Government have confirmed their refusal to accept the extension of territorial waters outside a three-mile limit to the International Law Commission. This panel of distinguished jurists appointed by the United Nations—is now engaged on codifying international law on the régime of the territorial sea. The Commission's report will in due course be submitted to the United Nations General Assembly for approval.

Mr. Usborne: In view of the great importance of getting this business of territorial limits settled at an early date, how soon does the right hon. Gentleman think the report will go to the United Nations? Will he then propose that the United Nations should try collectively to agree to a definite territorial limit as being one recognised throughout the world?

Sir A. Eden: I agree with the hon. Member's supplementary question. So far as we are concerned, the sooner the panel of distinguished jurists report the better we shall be pleased. Our endeavour will be to get the matter before the United Nations on the basis of that report as soon as possible.

Mr. Usborne: How soon will that be? Will it be a matter of a year?

Sir A. Eden: It is difficult for me to say how long a panel of international jurists will take. I am neither international nor a jurist, but I shall do my best to convey to them the wish of this House that the sooner they act the better this House will be pleased.

Mr. Tilney: As the freedom of the seas is of paramount interest to this country, and as it is possible for oil and other minerals to be discovered more than three miles away from any national shore, would my right hon. Friend agree that it might be a reasonable solution to put ocean beds more than three miles from any nation's shore under the jurisdiction of the United Nations?

Sir A. Eden: I should like to see that Question on the Order Paper.

Oral Answers to Questions — UNITED NATIONS

Nuclear Weapon Experiments, Marshall Islands (Precautions)

Mr. Sorensen: asked the Secretary of State for Foreign Affairs if he is aware that the precautionary measures taken to protect inhabitants of the Marshall Islands against the effect of nuclear weapon experiments were not in accordance with the recommendation of the United Nations Trusteeship Council; and whether he will instruct our representative at the United Nations to propose that it should call for a report on the measures which were taken.

Mr. Turton: The last nuclear weapon experiments in the Marshall Islands took place in March, 1954. The recomendations of the Trusteeship Council to which the hon. Member refers were made in the following June. The United States Government have accepted these recommendations. No further action is necessary.

Mr. Sorensen: Would the hon. Gentleman not agree that quite obviously sufficient precautions were not taken, in view of the fact that many Marshall Islanders suffered from this explosion and that others much further away also suffered? Can we be assured that sufficient precautions will be taken in future to see that no one suffers in the way that these people have been suffering recently?

Mr. Turton: I have explained that this Resolution was passed after the explosion because of the unfortunate incidents which happened in that explosion. The United States Government have accepted the Resolution.

Refugee Problem (Advisory Committee)

Mr. Janner: asked the Secretary of State for Foreign Affairs, in view of the United Kingdom having voted at the General Assembly for the resolution authorising the High Commissioner for Refugees to undertake a programme designed to achieve permanent solutions to refugee problems within the period of his mandate, what constructive proposals the United Kingdom representative on the High Commissioner's Advisory Committee will be instructed to make in order to develop such a programme.

Mr. Turton: The Advisory Committee is at present in session at Geneva. As my right hon. Friend the Minister of State for Foreign Affairs, the right hon. Member for Melton (Mr. Nutting) explained to the hon. Member on 2nd June, it is not the practice of Her Majesty's Government to divulge instructions given to representatives on international organisations in advance of their being acted upon.

Mr. Janner: Is the hon. Gentleman prepared to suggest that the policy of the Advisory Committee shall include longterm loans, and will he press for the long-term policy suggested in the Question?

Mr. Turton: While the Committee is in session, it would be unwise for me to go into details on matters which it is at present discussing. I dealt with the financial side in my reply to the hon. Member for Gravesend (Sir R. Acland), on 8th November.

U.S.A. AND FORMOSA (TREATY)

Sir L. Plummer: asked the Secretary of State for Foreign Affairs what representations he has made to the United States Government concerning the implications of the Treaty recently concluded between the United States of America and Nationalist China.

Mr. Wyatt: asked the Secretary of State for Foreign Affairs on what date, and in what manner, he was informed of the general lines of the Treaty concluded between the Nationalist Government in Formosa and the United States of America; and what information he has received as to the contents of the Treaty.

and 18. Mr. A. Henderson: asked the Secretary of State for Foreign Affairs (1) whether, in the cause of peace, Her Majesty's Government will co-operate with the United States Government with a view to securing an undertaking from the Chinese Nationalist authorities in Formosa not to engage in provocative action against the Chinese mainland;
(2) whether he will make a statement on the representations which have been made by Her Majesty's Government in the United Kingdom to the Governments


of the United States of America and China with a view to safeguarding peace in the Far East.

Mr. Driberg: asked the Secretary of State for Foreign Affairs what communication has recently been received from the United States Government on the Treaty between the United States of America and Nationalist China; and what representations have been made in reply.

Mr. Grimond: asked the Secretary of State for Foreign Affairs what information he has received from the Government of the United States of America about the recently completed agreement for the defence of Formosa.

Mr. Donnelly: asked the Secretary of State for Foreign Affairs whether he will make a statement on the information he has received from the United States Government regarding the security pact between the United States of America and the Formosa administration.

Sir Anthony Eden: Her Majesty's Government have been kept generally informed in recent weeks of the United States Government's intentions in this matter. Her Majesty's Government are satisfied that the Treaty is in fact purely defensive, and that its object is to place relations between the United States Government and the Nationalist Chinese on such a basis as will result in a closer degree of consultation. They hope that in this way it will help towards the end which the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson) has in mind.
No special representations have been made to the United States Government. Our views were made clear in the course of our consultations with them about the situation in the Far East.

Sir L. Plummer: May I ask whether the right hon. Gentleman has seen Mr. Dulles's statement at his Press Conference on 1st December, in which he allies this Treaty with other Treaties negotiated between the United States and her Allies for the control of the Pacific; that is to say, Mr. Dulles has associated this with S.E.A.T.O.? In view of that statement, will the right hon. Gentleman make it quite clear that we are not associated with bilateral treaties negotiated and signed by the United States?

Sir A. Eden: The hon. Member is perfectly right in the last part of his Question. We are in no sense parties to this Treaty.

Mr. A. Henderson: In view of the incidents which have taken place off the China mainland, may I ask whether it is the view of Her Majesty's Government that both the United States Government and the Chinese Government in Peking should avoid taking any action which might disturb the present situation in the Straits of Formosa?

Sir A. Eden: Our policy towards the islands off the Chinese coast has been to urge upon all concerned the dangers of fighting and the importance of lowering tension and the avoidance of precipitate action.

Mr. Grimond: In view of the fact that the right hon. Gentleman has said it is his wish that the Treaty should lower tension in the area, can he tell us if there is in the Treaty any provision which gives the United States Government any right of consultation before any action is taken by the Formosa Government, or is there no provision that the Formosa Government shall not attack China or any other territory?

Sir A. Eden: That is an important issue. I tried to deal with it in my speech on Monday. The position can be simply summarised by saying that there will be, as a result of the agreement, an increase in the degree of consultation between the two parties concerned. I should have thought that to us, who are anxious for greater security in that part of the world, that is something which, on balance, we ought to welcome.

Mr. Noel-Baker: Will the Foreign Secretary consider suggesting to the United States that it should now, in the light of President Eisenhower's most recent declaration, return to the policy of neutralising Formosa?

Sir A. Eden: I would rather not go beyond what I have said today. As the right hon. Gentleman knows, we must deal with the situation as it now exists. I think that the greatest contribution in that part of the world could now be made if those who have influence with the Chinese Government, wherever they may sit in this House, would persuade it to release the American airmen without any more delay.

POLITICAL AND MILITARY STRATEGY (GLOBAL ORGANISATION)

Mr. Emrys Hughes: asked the Secretary of State for Foreign Affairs to what extent Her Majesty's Government is committed to support of a global organisation of the non-Communist world to direct political and military strategy.

Sir Anthony Eden: The only global organisation which Her Majesty's Government is committed to support is the United Nations organisation.

Mr. Hughes: Is the Foreign Secretary aware that at a meeting in New York of the English-Speaking Union and the Foreign Policy Association, reported in the "Scotsman" on 2nd December, Field Marshal Montgomery called for a global organisation of the non-Communist world to direct political and military strategy? Does the Foreign Secretary repudiate Field Marshal Montgomery, and will he tell us how far Field Marshal Montgomery is authorised to explain British foreign policy in the United States of America?

Sir A. Eden: Field Marshal Montgomery is, of course, not a servant of Her Majesty's Government. He is a servant of N.A.T.O. He is perfectly entitled to express his opinion, as are other people in a world which is still free, despite the hon. Gentleman.

Mr. Hughes: In view of the Foreign Secretary's last reference, and the unsatisfactory and evasive nature of his answer, I give notice that I shall call the attention of the House to the subject on the Adjournment on the first possible occasion.

Oral Answers to Questions — KENYA

Africans (Death Sentences)

Mr. Fenner Brockway: asked the Secretary of State for the Colonies how many Africans have been executed in Kenya during the months September, October, and November, 1954, respectively; and how many of these were sentenced to death on the charge of killing another person or persons.

The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): In the four-week periods ended 1st October, 29th October and 26th November, 52, 35 and

56 respectively, of whom seven, three and 10 respectively were sentenced for murder.

Mr. Brockway: Is the right hon. Gentleman aware that many people will be shocked by the reply which he has just given? Does it not indicate that about a quarter of those who have been executed have been charged with murder? Will the right hon. Gentleman speed up the modification of the penalties which he has indicated to the House so that we may have some moral authority to denounce the more excessive atrocities by Mau Mau?

Mr. Lennox-Boyd: In reply to the last part of the hon. Gentleman's supplementary question, I have nothing to add to what I said to him on 1st November. In reply to the second part, I have said that murder represents a certain proportion of the figures, but the unlawful possession of arms, and particularly of ammunition, which the murderers cannot themselves manufacture, is rightly a capital offence.

Mr. Brockway: Is the right hon. Gentleman aware that with the animosities which there now are in Kenya it is very easy for ammunition to be placed, not by security forces but by others, in the huts of those to whom they are antagonistic? Have there not been cases of that character?

Mr. Lennox-Boyd: That danger is always possible, and because of that extreme care is taken, and no one is brought to trial unless there is evidence that he is an active terrorist or a helper of terrorists. I wish that the hon. Gentleman, when rightly quoting and deploring these inevitable figures, would also quote the fact that since the beginning of the emergency 1,319 civilians, of whom 1,272 were Africans, have been brutally murdered.

Mr. Brockway: On a point of order. In view of that last remark, might I be permitted to say—[HON. MEMBERS: "No."]—I am making the point to Mr. Speaker—that I never speak on this subject without denouncing the atrocities of Mau Mau?

Mau Mau Terrorists (Surrender Offer)

Mr. Brockway: asked the Secretary of State for the Colonies (1) what steps he proposes to take, in view


of the readiness last April of 1,000 Mau Mau adherents to lay down their arms, to renew negotiations to end the fighting in Kenya;
(2) the date of the withdrawal of the undertaking made in the General China negotiations that Mau Mau adherents who laid down their arms would not be subject to the death penalty.

Mr. Lennox-Boyd: The terms offered after the so-called "General China's" capture were withdrawn on 10th April, when all efforts to re-establish contact with the gangs had failed. The original surrender offer of August, 1953, remains open to individuals, and the Kenya Government are ready to consider any approach for a mass surrender from gang leaders and to discuss with their intermediaries how this can be effected.

Mr. Brockway: The right hon. Gentleman says that efforts to contact the Mau Mau leaders have failed, but is it not the case that 1,000 adherents of Mau Mau gathered together to lay down their arms, and in view of that evidence of intention among Mau Mau adherents to lay down arms, is it not time that negotiations were renewed in order to prevent loss of life among both Africans and Europeans in Kenya?

Mr. Lennox-Boyd: As the hon. Gentleman knows, there is no central terrorist headquarters to which Her Majesty's Government in Kenya can make an approach, but it is clearly known to the leaders of these brutal gangs that they can themselves come forward. If individual leaders came forward, it would then be possible to explain to them details of time and place for bringing others to surrender.

Mr. A. Henderson: Are the terms of surrender offered last year final? Is there any possibility of their being revised to make them more, shall I say, attractive to those who may be induced to surrender?

Mr. Lennox-Boyd: The terms of surrender of August, 1953, provided that any terrorists who surrendered voluntarily would not be executed for being in unlawful possession of arms and ammunition, or consorting with terrorists. It is essential that some latitude should be left to the Government of Kenya in the granting

of clemency to criminals, but I am perfectly certain that they desire—a desire common to all of us in this House—to bring this terrible business to an end at the earliest possible date. I am sure that, consistent with their duty and the public interest, they will look constantly afresh at any possibility.

Mr. Alport: In view of the new situation which exists in Kenya, have any special efforts been made to draw the attention, not only of the Mau Mau leaders, but of the rank and file of the movement, to the existence of these surrender terms, to encourage, as far as possible in the present circumstances, a return to the situation which appeared to be so promising during the "China" episode?

Mr. Lennox-Boyd: Constant efforts are made, through broadcasting from low-flying aircraft and in other ways, to bring this home to them. But I will certainly, in consultation with the Government of Kenya, see how far further steps can be taken to bring home to the rank and file the possibilities in this field.

Mr. Paget: Is the right hon. Gentleman aware that all through the history of guerrilla warfare severities have always proved to be the worst possible weapon? Is it not really time that we should make an energetic effort to bring about a surrender, and offer, to use my right hon. and learned Friend's term, attractive terms? Surely it is time to say that there should be clemency.

Mr. Lennox-Boyd: I do not know whether the hon. Member knows Kenya well. If he did, he would agree that the realisation that it is necessary, in the present tragic circumstances, to have these penal sentences is shared by a vast number of Africans themselves.

Anti-Mau Mau Operation (Care of Children)

Mr. Manuel: asked the Secretary of State for the Colonies what action has been taken to provide for the children of persons detained during the "Anvil" Operation in Nairobi.

Mr. Lennox-Boyd: The number of children in Nairobi separated from their parents and in need of care is estimated at 500. The "Save the Children Fund"


has opened a "Place of Safety" where children will be cared for until they can be returned to their parents or relatives. Where that is not possible, the Missions will provide for their care.
I wish to express my very real gratitude for the important work which various voluntary societies have so generously undertaken.

Mr. Manuel: The right hon. Gentleman is, of course, aware that the Government were committed to do all they could to look after these children because of Operation "Anvil." Is he certain there are not now numbers of children whose parents have been taken away, because of Operation "Anvil," and who are still left unattended? From my information I am not certain that what could be done is being done by our representatives there.

Mr. Lennox-Boyd: This is a great human problem, and I can frankly tell the House I looked into it with close personal care when I was in Nairobi. In large part, due to the vigorous action of Mr. Havelock, a member of the Council of Ministers in Kenya, real progress is being made. Last week I had a talk with Brigadier Boyce, Secretary of the "Save the Children Fund," and I can assure the hon. Gentleman that we are fully conscious of this need, and it is now under control. The whole problem of juvenile delinquency in Nairobi is a very real one still.

Mr. Noel-Baker: Is the Secretary of State aware that the "Save the Children Fund" has very heavy commitments in many parts of the world, including Korea; and will the Government give a subsidy to the Fund for doing this job, which the Government should have done?

Mr. Lennox-Boyd: Her Majesty's Government have rightly given £11¼ million in gifts or loans to Kenya. This situation is clearly one of the social consequences of the emergency, and I am quite certain that no shortage of funds will stand in the way of proper work along these lines.

Mr. Wilfred Paling: May we take it that that answer means that the care of these children is left completely to voluntary societies?

Mr. Lennox-Boyd: If the hon. Member had been listening to what I said he would

have known that progress has been largely due to the work of a Minister of the Kenya Government.

Mau Mau Convicts and Detainees

Mr. A. Roberts: asked the Secretary of State for the Colonies how many Mau Mau prisoners are in captivity; and the weekly unit cost of each prisoner.

Mr. Lennox-Boyd: On 15th November, there were 17,629 Mau Mau convicts in prison and 47,562 persons detained in "Anvil" works and detention camps. The estimated cost per week of each prisoner is 16s., and of each detainee 15s. 4d.

Mr. Roberts: Will the right hon. Gentleman consider putting into operation any form of rehabilitation?

Mr. Lennox-Boyd: A great deal certainly goes on in the works camps. As soon as an opportunity arises, people who have been certified as safe to be moved are moved off to chances of productive and sensible work.

Mr. Stokes: Has the situation now changed? A short time ago we were told that there were not enough guards to allow of more than two weeks' work being done every eight weeks. Has that situation now altered, and is everybody now working all the time?

Mr. Lennox-Boyd: No; everybody is not working all the time, because the circumstances are not open to those people who remain the hard core to engage in work far away from the works centre. The shortage of staff, though still a factor, is now more under control.

Mr. J. Johnson: Can the Minister tell us how many of these prisoners have been screened and given a clean bill of health, and how many have now got back to their old jobs in civil life? If none have done so, when does the Minister hope to begin to send them back?

Mr. Lennox-Boyd: If the hon. Member will put down a Question upon that matter I shall gladly answer it, but I was asked about those who were now in prison or under detention. Of those in detention, a number at Manyani would have been returned home by now had it not been for typhoid. I shall gladly answer any Question which the hon. Member puts down upon this matter.

Legislative Council (African Representatives)

Mr. George Craddock: asked the Secretary of State for the Colonies what progress has been made in providing for the direct election of African representatives to the Kenya Legislative Council.

Mr. Lennox-Boyd: I have nothing to add to the reply which I gave to the hon. Member for Rugby (Mr. J. Johnson) on 20th October.

Mr. Craddock: Does not the Minister agree that it is the very essence of democracy that these indigenous peoples of Kenya should have direct representation on the legislative body?

Mr. Lennox-Boyd: It is also the very essence of democracy—if I may say so without giving offence—that hon. Members of this House should read a very careful answer which I gave, which said that in a few weeks' time a Mr. Coutts was going out to Kenya, and, in consultation with the Africans, was going to advise upon that very matter.

Mr. Craddock: Is it not the fact that this matter has been under consideration for quite a time and that nothing has yet eventuated? Surely the Minister can speed up the matter?

Mr. Lennox-Boyd: The Lyttelton Plan—as it is generally called—which is a great step forward towards multi-racial government, is not yet a year old, and the proposed visit of Mr. Coutts is a further factor in that advance. Clearly, circumstances in Kenya must be taken into account in regard to constitutional developments.

Macmillan Memorial Library, Nairobi (Grant)

Mr. Manuel: asked the Secretary of State for the Colonies if he will make the grant to the Macmillan Memorial Library in Nairobi conditional upon the use of the library being open to Africans and Asians as well as Europeans.

Mr. Lennox-Boyd: No, Sir. This library was established under a trust deed which specified that it should be for the use of Europeans.

Mr. Manuel: Is the right hon. Gentleman aware that, although the Nairobi City Council supports this library, there is also a fairly substantial grant from

the Carnegie Trust? Does he consider that he carries the Trust members with him in providing in Nairobi a memorial library which is not open to Asians and Africans?

Mr. Lennox-Boyd: That is for the trustees to consider. As far as the Government are concerned, they also make grants to the Desai Memorial Library in Nairobi and the Saif bin Salim Library in Mombasa, both of which are run on a communal basis. There could be no question of a Government library being reserved for the use of Europeans.

Mr. Foot: Will the Minister explain how he justifies giving the taxpayers' money to subsidise an institution which practises the colour bar?

Mr. Lennox-Boyd: I think it must be borne in mind that in Kenya there are quite a number of European taxpayers.

Male Kikuyu

Mrs. Slater: asked the Secretary of State far the Colonies how many male Kikuyu have been killed by security forces, executed judicially, and died in prison or detention camps during the past 12 months.

Mr. Lennox-Boyd: 4,406 terrorists have been killed, of whom between 60 per cent. and 70 per cent. were Kikuyu; 528 have been executed, and 342 have died in prison and detention camps.

Mrs. Slater: asked the Secretary of State for the Colonies the estimated male Kikuyu population between the ages of 15 and 59 years in 1951.

Mr. Lennox-Boyd: Approximately 280,000.

Mrs. Slater: Is the Minister aware that there are about 10½ million males between the ages of 19 and 49 in this country, and that, if there were an equivalent death rate amongst them, there would be widespread anger? Does he not think that it is time that the Government were taking stronger measures to prevent this death rate?

Mr. Lennox-Boyd: I also think that if there were some of these dangers and horrors closer at home some of the people who talk so glibly about them might speak in a different way.

Coffee Board

Mr. J. Hynd: asked the Secretary of State for the Colonies what maximum signing on rate has been recommended for African workers by the Kenya Coffee Board and whether he will state the real value of such rate today as compared with the pre-war rate of 9s. per month.

Mr. Lennox-Boyd: The Governor has informed me that it will take a few days to collect the information. I will write to the hon. Member as soon as it is received.

Mr. J. Hynd: asked the Secretary of State for the Colonies whether he will explain what are the persons known as coffee officers who are now invited to attend conferences of the Kenya Coffee Board, in company with African planters; and how and by whom the latter are selected to accompany such coffee officers.

Mr. Lennox-Boyd: They are Government officers of the Agricultural Department. I have consulted the Governor about the second half of the Question, and will write to the hon. Member when I receive his reply.

Mr. Hynd: Will the Minister add to his inquiries of the Governor to ascertain whether amongst these African people there are representatives of the African co-operatives?

Kikuyu Tribesman (Death Sentence)

Mr. S. Silverman: asked the Secretary of State for the Colonies if the Kikuyu tribesman recently sentenced to death for receiving six pieces of cloth intended for Mau Mau has been hanged.

Mr. Lennox-Boyd: No, Sir.

Mr. Silverman: Has it occurred to the right hon. Gentleman that, in circumstances in which 20 per cent. of the native population is, in one form or another, under continuous detention, and where the death penalty is inflicted for almost trivial offences, it is not likely that the British way of life would commend itself to the native population; and, in these circumstances, does he not agree that his whole policy may perhaps be mistaken?

Mr. Lennox-Boyd: That seems to me to be clearly outside the scope of this particular Question, and I should hesitate to comment on this Question because, as I think the hon. Gentleman knows, the reasoned judgments have not yet been delivered on these particular sentences, and I think it is better to wait until the reasoned judgments have been received.

Stolen Property

Mr. S. Silverman: asked the Secretary of State for the Colonies whether he will now withdraw the Emergency Regulation under which it is a capital offence to receive stolen property in Kenya.

Mr. Lennox-Boyd: Receiving stolen property is not a capital offence but under Emergency Regulation 8 F (1) demanding, collecting or receiving supplies by or for terrorists is a capital offence.

Mr. Silverman: Is the right hon. Gentleman aware that, in the case to which reference has already been made—the receiving of six pieces of cloth—it has so far been held to be the commission of a capital offence under this Regulation, and, in these circumstances and in the circumstances to which I drew his attention in a supplementary question a moment ago, will he consider whether the whole basis of this tyrannical Emergency Regulation should be reconsidered?

Mr. Lennox-Boyd: Any comment from me which would have been improper on Question 50 is equally improper on Question 51.

GIBRALTAR (DEVELOPMENT DISCUSSIONS)

Mr. G. Jeger: asked the Secretary of State for the Colonies what practical proposals for the development of Gibraltar were discussed with the recent delegation.

The Minister of State for Colonial Affairs (Mr. Henry Hopkinson): These discussions covered the plan which the Governor of Gibraltar recently put forward for development during the next five years, including improvement of the port and an extended programme of housing.

EMERGENCY, MALAYA (COST)

Mr. T. Reid: asked the Secretary of State for the Colonies the cost to Her Majesty's Government of the recent military operations in Malaya up to date; and what further demands on Her Majesty's Government are likely to be made annually until law and order have been established.

Mr. Hopkinson: Exact figures are not available but since 1949 excess in the cost of supplying and maintaining the external Forces in Malaya over the cost of their maintenance in their normal stations has been in the region of £35 million to £40 million. In addition, Her Majesty's Government have made special grants to the Government of the Federation of f14 million. The cost of the emergency in future years cannot be exactly forecast.

Mr. Reid: Is not this Malayan business part of the general hot or cold war against Communist forces? Surely other countries besides Great Britain should take some part in this campaign by supplying men and money, even if the neutralists leave the rough work to others.

Mr. Hopkinson: This is, of course, part of the major Communist campaign. We must recognise the fact that both the United States and France have paid out very large sums in their own particular fields, both in Korea and Indo-China.

Mr. Reid: I was thinking more of the countries in South-East Asia, such as Australia and New Zealand. Could they not contribute some resources?

COLONIAL PRISONERS (ANKLE IRONS)

Mr. Manuel: asked the Secretary of State for the Colonies in which Colonies and Protectorates it is the practice to attach chains to the ankles of prisoners, and to what categories of prisoners this treatment is applied.

Mr. Hopkinson: In 1952, the attention of all Colonial Governments was drawn to the very strict Regulations governing the use of mechanical restraints on prisoners in the United Kingdom. They were invited to bring local practice as far

as possible into conformity with United Kingdom practice. The replies so far received show some measure of conformity but my information is still by no means complete. If the hon. Member has any particular case in mind, I shall be glad to look into it.

Mr. Manuel: Surely the right hon. Gentleman is aware of the report in the London "Star" of 5th November, quite clearly indicating that prisoners are being chained—that there have been attempts to escape after these chains had been filed from prisoners' ankles. This smacks of the methods of the Inquisition. Will he not do something really worth-while about it?

Mr. Hopkinson: I have already said that we have had replies from a certain number of our Territories. In fact, of under 20 from whom we have had replies, ankle chains are being used in only nine. [HON. MEMBERS: "Oh."] But let me point out that those are Territories in many cases—both in West Africa, East Africa and the West Indies—with a very high degree of self-government, Territories such as Nigeria, in which we must be very careful how far we interfere.

Mr. Foot: As the Question on the Order Paper was to ask the Minister in which Colonies and Protectorates this practice of using mechanical restraints is still being employed, should he not have given an answer to the Question, instead of saving the number for a reply to a supplementary question? Should he not now publish the names of the Colonies in which this practice is going on?

Mr. Hopkinson: We are waiting until we get a complete list of all our Colonies. As soon as we do so, we shall circulate a complete analysis.

Mr. Manuel: Would not the right hon. Gentleman agree to publish the names of the nine where he does know that ankle chains are still being used?

Mr. Hopkinson: Certainly.

Mr. Stokes: May I ask the Minister why he is holding back? If he knows a certain number of Colonies in which they are being used now, why should he not say so? We could have a complete list later.

Mr. Hopkinson: I am quite prepared to do that, and I have just said so.

Mr. Rankin: On a point of order. Is it in order for the Minister to deceive the House?

Mr. Speaker: Order. The hon. Member should not accuse another Member of this House of deceiving the House.

Mr. Rankin: I am sorry, Sir. Is it in order for the Minister to mislead the House? He invited my hon. Friend to submit instances to him, but he later said he knew of nine.

Mr. Speaker: I am afraid that that is not a point of order for me.

Oral Answers to Questions — CENTRAL AFRICA

Injured Prisoner, Petauke

Sir L. Plummer: asked the Secretary of State for the Colonies what were the circumstances under which Abnep Phiri, a hard labour prisoner, was injured at Petauke, Northern Rhodesia, on or about 30th October, 1954; whether he was attended by a doctor after his injury; what charge has been made in connection with the injury; and if he will institute an inquiry.

Mr. Hopkinson: Abnep Phiri fainted on 31st October when carrying water; there is no doctor at Petauke, but he was immediately admitted to the station dispensary and treated for a cut lip presumed to have been caused by his fall, and discharged as fit on 1st November; no charge has been made in connection with this incident; no complaint was made to the visiting justice on 5th November, and the Governor does not consider that an inquiry is necessary.

Sir L. Plummer: Will the Minister look at some papers I will send him, which indicate that this man was beaten upon the back, chest and face by a policeman with a rifle; was taken unconscious into hospital on 31st October, and was in a grave state of health on 1st November? Will the Minister look at these particulars if I send them to him?

Mr. Hopkinson: I shall certainly consider any papers which the hon. Member submits, but I should inform the House that the District Commissioner

and the European health inspector visited Abnep Phiri immediately after he was admitted to the dispensary. No complaint was received by the District Commissioner at any time, but, in spite of that, he ordered an immediate inquiry as to whether the messenger-warder who was supposed to have beaten him up had been involved in any kind of criminal offence—and he was satisfied that that was not so. I shall, however, certainly be glad to examine the hon. Member's documents.

Sir L. Plummer: Was there a suspicion in the mind of that official that the man was beaten up?

Mr. Hopkinson: I think that there was some suspicion, but he was satisfied that it was not the case.

Northern Rhodesia (District Commissioners' Powers)

Sir L. Plummer: asked the Secretary of State for the Colonies to what extent District Commissioners in Northern Rhodesia have authority to issue orders with the force of law in their administrative areas, irrespective of endorsement by the local chiefs.

Mr. Lennox-Boyd: District Commissioners have wide powers to issue lawful orders, not requiring endorsement by local chiefs, under many ordinances, including powers, as magistrates, to issue court orders. I assume, however, that the hon. Member has in mind orders made under the Native Authority Ordinance. A District Commissioner has no authority to issue orders with force of law under that Ordinance without endorsement by the local chief, except in an emergency in which the Governor has, under the Ordinance, ordered him to assume the powers of the native authority.

Sir L. Plummer: May I assume from that answer that the Minister is adhering to the policy of indirect rule?

Mr. Lennox-Boyd: I think that there is a great deal to be said for that policy, but I am not quite certain of all the implications of the hon. Member's question.

Oral Answers to Questions — EAST AFRICA

Uganda (Deported National Congress Leader)

Mr. George Craddock: asked the Secretary of State for the Colonies if, in view of the improved situation in Uganda, he will consult with the Governor with a view to the early liberation of Mr. Kiwanaku, Vice-President of the Uganda National Congress, who has been deported to the northern frontier area.

Mr. Lennox-Boyd: I have brought the hon. Member's suggestion to the attention of the Governor. He does not feel able to cancel the Order at present, but he is keeping the matter under regular review.

Mr. Craddock: Is it not a fact that Mr. Kiwanaku only repeated the contents of an article published in this country, for which no action was taken against the author, and yet, when it was repeated in Uganda, this man was sent to prison for four months?

Mr. Lennox-Boyd: It would be quite improper for me to comment upon the action taken by judicial authorities in Colonial Territories. This man has been convicted of sedition on three occasions. I am not prepared now, without warning, to go over the particular circumstances of each case. As I have said, the Governor has this case under constant review.

Mr. S. Silverman: Is the right hon. Gentleman really telling the British House of Commons, in the middle of the 20th century, that it is no concern of his if, in a British Colony, that is treated as sedition which is harmless at home?

Mr. Lennox-Boyd: I said no such thing. I said that it would be improper for me to comment upon the judgment of a court—and I think that that is a very good principle.

Makerere College (Medical Degrees)

Mr. Rankin: asked the Secretary of State for the Colonies whether he will press for the recognition of medical degrees given by the Makerere College, as a qualification to practise medicine in the United Kingdom and the Colonies.

Mr. Hopkinson: It is the policy of Her Majesty's Government to encourage the raising of the standard of medical qualifications accorded by the university

colleges in the Colonies to a level at which they can be recognised by the General Medical Council in the United Kingdom and by Colonial Governments generally.
Representatives of the Council have already visited Makerere on more than one occasion for the purpose of reporting to the Council on the standards achieved at the Mulago medical school, and a further such visit can be expected to be made at an appropriate time.

Mr. Speaker: Mr. Stewart.

Mr. Rankin: rose—

Mr. Speaker: I did not observe the hon. Member rise before, and I have already called Mr. Stewart.

Mr. Rankin: On a point of order. Surely I was on my feet immediately the Minister sat down?

Mr. Speaker: We may differ about a moment of time, but I looked at the hon. Gentleman and I did not know whether he was going to rise or not. If any hon. Gentleman wishes to ask a supplementary question, it is only fair to other hon. Members that he should rise immediately.

Mr. M. Stewart: Further to that point of order. May I respectfully say, Mr. Speaker, that it was apparent to me that my hon. Friend wished to rise, which was the reason I hesitated in rising.

Mr. Speaker: I did not observe that, but, as I do not want to be unfair to the hon. Member, perhaps he will ask his supplementary question now.

Mr. Rankin: Is the Minister aware that he has not answered the Question which I placed on the Order Paper? My Question asked him whether he will press for the recognition of medical degrees given by the Makerere College as a qualification to practise medicine in the United Kingdom. He has not answered that Question.

Mr. Hopkinson: I thought I made it quite clear that the General Medical Council is the body which grants recognition of medical qualifications, and that this is entirely a matter for the discretion of the Council itself.

Societies Ordinance, Tanganyika

Mr. J. Hynd: asked the Secretary of State for the Colonies why the Mwanza Branch of the Tanganyika African Union


has been refused registration under the Societies Ordinance.

Mr. Lennox-Boyd: Registration has been refused because the Registrar of Societies was satisfied that this branch was being used for purposes prejudicial to peace, order, and good government.

Mr. Hynd: Does not the refusal of registration mean that this branch is unlawful and that its property is now vested in the District Commissioner; and should that be done without adequate reason? Can the House be given the reason, because, if there has been any disorder, has it not been completely isolated, and may it not be due to the fact that the people have not been properly informed about some of the problems with which they are concerned?

Mr. Lennox-Boyd: I think that certainly the people who are sometimes called professional society organisers, some of whom have interests quite apart from the interests of their so-called constituents, are fully informed as to the law. Over 200 applications for registration have been granted, and only four have been refused, and nothing could be worse for these societies than that the wrong society should be recognised.

Mr. Hynd: May I ask the Minister to tell the House the circumstances which caused the banning of this society, because it is most important that the House should know?

Mr. Lennox-Boyd: The Ordinance under which the registrar acted is Section 9 (a), under which it is open to him to refuse registration where he is satisfied that the society is being used for purposes 'prejudicial to or incompatible with the maintenance of peace, order, and good government. It is not always desirable in public to give all the reasons which lead a responsible official to come to a conclusion of that kind.

Mr. Hynd: I will follow that up later.

CHINESE STUDENT, SINGAPORE (PRISONSENTENCE)

Mr. Rankin: asked the Secretary of State for the Colonies if he will recommend the exercise of the Prerogative of mercy in the case of the Chinese school student in Singapore who was sentenced to three years' rigorous imprisonment on 3rd November last for being in posses-

sion of a certain periodical which was found under the mattress of his bed.

Mr. Hopkinson: No, Sir. The exercise of Her Majesty's Prerogative of mercy has been delegated to the Governor, and it would be contrary to long-established practice for the Secretary of State to intervene.

Mr. Rankin: In view of the vicious nature of this sentence—which cannot promote good relations in Malaya—does not the Minister agree that he should bring his influence to bear upon the Governor to get him to reconsider the sentence?

Mr. Hopkinson: The facts of this case are that this student was found in possession not of a periodical but of a strongly-worded though uncompleted Communist Party directive, of which he was the author. As the House is aware, the Communists are seeking to exploit to the uttermost the Chinese schools in the Colony, and there is need for very strong measures to combat this very real danger.

Mr. Rankin: Is it not the case that the Minister is trying to bring the British way of life into active practice in Malaya? Does the treatment of this man represent the British way of life?

COLOURED PEOPLE, GREAT BRITAIN

Mr. M. Stewart: asked the Secretary of State for the Colonies whether he will appoint a committee to inquire into the position of coloured people in Great Britain.

Mr. Hopkinson: I cannot at present add to the reply my right hon. Friend gave to the hon. Member's Question on the same subject on 3rd November.

Mr. Stewart: Will the Minister recognise that 3rd November is now more than a month ago, that many local authorities are facing problems in this connection which are really beyond their resources, and that it is desirable in the interests of everyone that the Government should give a lead in this matter?

Mr. Hopkinson: I am aware of the interest and anxiety on this matter, which is being very actively considered. It is not a simple matter, as I explained in a recent Adjournment debate, but I hope it will be possible to make a statement on the subject very soon.

Orders of the Day — NATIONAL INSURANCE BILL

Order for Second Reading read.

3.30 p.m.

The Minister of Pensions and National Insurance (Mr. Osbert Peake): I beg to move, That the Bill be now read a Second time.
This Bill, as hon. Members will see, is strictly limited to benefits and contributions, both for National Insurance and for the Industrial Injuries Insurance Scheme. In fact, it is the outcome of the actual statutory review, the provisions for which were laid down in Section 39 and 40 of the National Insurance Act, 1946.
Some criticism has been made of the timing of this Measure. As Minister, I am not a free agent in the matter of the timing of the Bill. My duties were laid down in the Statute of 1946, and I cannot act under Section 40 of that Act until the Government Actuary has made his report under Section 39 to the Treasury, and that report has been laid before this House.
Nevertheless, despite the fact that I am acting under this statutory obligation, I am told both alternately and alternatively by different newspapers, often on the same day and by the same paper on different days, that I am acting both too soon and too late—too soon because, it is said, I should have waited to give full consideration to the Report of the Phillips Committee, and too late because I should have acted out of the blue and not waited to exercise my statutory duties under Section 40 of the Act. Those criticisms seem to me to cancel each other out.
The only comment I would make upon the timing of this operation is this. If hon. Members will look at the interim reports of the Government Actuary, made when the right hon. Member for Llanelly (Mr. J. Griffiths) and the right hon. Lady the Member for Fulham, West (Dr. Summerskill) were the Ministers, as well as after I succeeded them and became Minister in 1951, they will see that nearly always it took the Government Actuary between 11 and 14 or 15 months after the close of the financial year to prepare his interim report.
All I did in this matter was to ask the Government Actuary to give top priority

to his work on the quinquennial review so that his Report could be available much sooner after the close of the financial year ending March, 1954, than would otherwise have been the case. Of course, I had to wait for the Report of the Government Actuary. Not only was it so laid down in the Statute, but those of us who 'studied the scheme—such as the hon. Member for Sowerby (Mr. Houghton), who I see in his place—all knew that the operations of 1951 had upset the balance of contributions and that there would be a good deal of investigation to be carried out before the new rates of contribution could be worked out.
Let me say a word about the work of the Phillips Committee. We are greatly indebted to that Committee for the work which it has done. That work forms a part of the wider non-statutory review of the National Insurance Scheme which was promised on many occasions by the right hon. Member for Llanelly, by the right hon. Lady the Member for Fulham, West and by myself. I think that we all share this in common, that, when confronted with an awkward supplementary question, we all have said from time to time, "That can well be considered when we come to the quinquennial review." Therefore, the House has been led to expect, and rightly so, that a much wider review of the Scheme would be undertaken than the narrow review laid down by Sections 39 and 40 of the Act.
I do not think that there is any controversy about this matter, and, in point of fact, this wider non-statutory review is proceeding today. The Report of the Phillips Committee forms part of it, and we are to have a day after the Christmas Recess on which we can debate that Report. But there are some very important questions to which I have referred and which are still before the National Insurance Advisory Committee.
For example, that Committee is considering the conditions for dependants' benefit, and that, of course, includes all the provisions for widowhood which were novel in 1948 when this Scheme first came into full operation. Only two years ago we made a review of the maternity provisions, which were also novel, and we found that they needed remodelling to quite a considerable extent. It is quite likely, I think, in view of the


National Insurance Advisory Committee's investigation, that we may have to remodel at any rate the provisions for widowhood and other dependants. May I say, in passing, that that review includes the question of the 10s. widow about whom so many hon. Members have from time to time put questions to me.
The Advisory Committee has also before it the contribution conditions for all the different benefits which are exceedingly complicated and which vary from one benefit to another. That, again, is a very important question. Thirdly, the Committee is reviewing the contribution liability of the smaller income groups.

Miss Irene Ward: Hear, hear.

Mr. Peake: Well, that also is an interesting matter, and I shall look forward to the Report of the Advisory Committee upon it.
I think it is obvious from what I have said that as a result of these much wider issues, it is quite probable, to put it at its lowest, that further legislation will need to be undertaken at a later date. It really would have been quite impracticable from a political angle—and I think that everybody on all sides of the House will agree about this—for us to have taken a long and complex Bill upstairs in Standing Committee, sitting two days a week, with our debates prolonged, perhaps, for several months, while elderly people and other disabled people waited to receive their improvements in benefits which were bound to come about when the quinquennial review was undertaken.

Mr. H. Hynd: What about the 10s. widow?

Mr. Peake: I do not propose to be diverted, in the course of my speech, to discuss the 10s. widow today. As I say, that question is before the National Insurance Advisory Committee at the present time.
We were always anxious, where it was humanly possible, to see the Phillips Report, but the key date, so far as I was concerned, was that of the Report of the Government Actuary. It would have been a little discourteous to the Phillips Committee to have gone ahead without seeing whether any of its recom-

mendations were in direct conflict with anything that we were likely to propose. But, having seen that Report, I think the House will agree that I have acted, and brought this Measure forward, at the earliest possible moment. I can give this assurance. No delay has been caused to any retirement pensioner or anyone else because the deliberations of the Phillips Committee have been somewhat protracted.
From what I have said, I hope that it will be clear to hon. Members that, in this two-day debate on the benefit and contribution rates contained in the Bill, to discuss such matters as the retirement principle, or the earnings rule, or the 10s. widow, would really be a work of supererogation, or, in case that phrase is not fully understood, it would, as the late Sir George Robey said, be a waste of time and breath to do so.
The Phillips Report clearly needs a full day's discussion. One point in it about which I should like to say something is the rather qualified recommendation—about which a good deal of dissent is expressed in the Report—regarding the raising of the pension age. Let no one be dismayed. I, too, as well as the Phillips Committee, have been studying this question of the pension age for three years or more.
Hon. Members will recall that the vista, if I may so call it, of raising the pension age was first opened by the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), as Chancellor of the Exchequer in his Budget speech of 1951. I think that some of us who thought that his intentions were serious were led a little way up the garden path by the right hon. Gentleman at that time.
Three years' study of the question makes me more and more sceptical about any gain to the National Insurance Fund or to our national economy by raising the age. The recent report of the investigation made by my Ministry into the reasons why people retire, or why they stay at work, serves to reinforce my view. I am confident that increased claims by elderly people for sickness benefit and unemployment benefit would virtually—and might wholly—cancel any advantage claimed for such a raising of the age. Therefore, let no whispering campaign begin that it is the secret intention of the Government to raise the


pension age. Such a whispering campaign would only cause needless alarm and would eventually rebound upon the heads of those who started it.
Let me now turn to one of the two main topics presented in the Bill—the new rates of benefit. Hon. Members will observe that we have taken the 1946 level of benefits—which we undertook to restore in full—and have, broadly speaking, added 50 per cent. to it and have then rounded off the figure in an upward direction. For example, the standard 1946 rate of 26s. has become 40s. A 50 per cent. increase would have made it 39s., but we have rounded it up to 40s. In 1946, the married rate was 42s.; it now goes to 65s., which is, again, rather more than a 50 per cent. increase.
These increases, of course, compare with a rise in the cost-of-living index of 44 per cent. since the same date. I know that hon. and right hon. Members opposite challenge the validity of the cost-of-living index. I would only say that it was, as one used to read on the programmes of the old musical comedies, devised, written and composed by right hon. Members opposite.
I have seen no complaint whatever about the inadequacy of the new rates of benefits. Only the "Daily Worker" and the National Federation of Old Age Pensions Associations have said that they are too little. The party opposite is certainly in no position to complain that these increases are inadequate. It is only three weeks ago, standing at this very Box, that I asked hon. Members opposite—and right hon. Gentlemen, too—to suggest their figure for the increase in the basic rate. And answer came there none. Not a voice was raised. Their minds were open—wide open. Open, I think I may say, to the point of vacuity.
Let the House consider this further point. With the exception of the pension rate, which was raised—for some pensioners only—in the autumn of 1951, all other National Insurance benefit rates were the same in October, 1951, as they were when first fixed in the 1946 Act. Unemployment benefit, sickness benefit—the whole run of National Insurance benefits—were the same when we took office in October, 1951, as they had been five years before. Of course, since October, 1951, there has been a rise in the

cost of living of 11 per cent.; yet all these rates are increased by a figure in excess of 50 per cent. That is something for which I think we may feel real satisfaction.
Now let us just look at industrial injuries benefits, because this is a subject in which I, and the right hon. Gentleman opposite, have always taken a great personal interest. They, too, remained unchanged from 1946 until 1951. The one exception was the special hardship allowance, the ceiling—and only the ceiling—of which was raised in 1948. The main benefit rates remained stable.
The injury benefit rate in October, 1951, therefore, was 45s. In the Bill that has gone up 50 per cent. to £3 7s. 6d. The 100 per cent. pension rate is the same as the injury benefit rate. A severely disabled single man in October, 1951, was getting 45s. plus £1 unemployability supplement, making a total of 65s. The Bill proposes that he should get the main rate of 67s. 6d. with an unemployability supplement of 40s., making £5 7s. 6d. in all.
That is an increase of about 65 per cent. since we took office. When we take the very extreme case of the really seriously injured married man with two children, with all allowances, constant attendance, and so forth, the figure was nearly £7 in October, 1951, and £10 15s. 6d. under the Bill. Under the Industrial Injuries Scheme that money is, of course, tax free.
I turn for a moment to contributions, which is, I imagine, a much more contentious topic. But before I come to the serious work I must deal briefly with the intervention in yesterday's debate by the right hon. Gentleman the Member for Leeds, South, whom I am sorry not to see in his place. He has not been selected for this particular test match. But he decided to bowl a few overs yesterday, and he was promptly no-balled by you, Mr. Speaker, and, I may say, rightly no-balled.
But, quite apart from being no-balled, every delivery of his was a wide, and on yesterday's form he does not stand much chance of being selected for a National Insurance test match. I have, however, read in the papers that he and the right hon. Member for Ebbw Vale (Mr. Bevan) are likely to come out from the pavilion


together and bat through the Committee stage on Monday.
I recall the bitter attack of the right hon. Member for Ebbw Vale on the right hon. Member for Leeds, South in 1951 when he accused him of having robbed the Insurance Fund of £100 million a year. I shall look forward with eager anticipation to seeing these two batsmen come out together both of Whose main objective is to run the other batsman out.
Let us look at what the right hon. Member for Leeds, South said about this topic yesterday:
The Minister of Defence, in winding up a recent debate on pensions, made great play with something that I said during my Budget speech in 1951. He said that we then found £39 million for the increases in pensions and he poured scorn upon us.
The right hon. Gentleman went on to say:
… at least we can say that when we had to offset the increased expenditure on pensions and other benefits as a result of the measures of 1951, we found the money entirely out of general taxation.
What do we have now? We have a scheme costing altogether about £134 million, of which the Government are paying £25 million. Indeed, if we exclude the £15 million for war pensions, and if we are talking about National Insurance and National Assistance only, the Government are paying only £10 million and the contributors themselves are finding £100 million.—[OFFICIAL, REPORT, 7th December, 1954; Vol. 535, c. 799–800.]
The right hon. Gentleman there, first of all, for some reason or other, deducts the £15 million which the increases in war pensions are to cost my right hon. Friend the Chancellor in the Budget for 1955–56. He then compares the figure of £10 million, which he gets by deducting that £15 million from the £25 million—the global cost—with the £39 million which was extra expenditure out of the Insurance Fund in the year 1951. It did not come out of the Exchequer in 1951. It came out of the National Insurance Fund.
Of course, the true comparison with his figure of £39 million for 1951 is not the £10 million which he quoted; it is the £120 million out of the Insurance Funds which we are to find as a result of this Bill—[HON. MEMBERS: "We?"]—which is to be paid out by the National Insurance Funds. That is the true figure to compare with the £39 million for which

the right hon. Gentleman claimed credit in his speech last night.

Mr. Douglas Jay: So that we can get the matter clear, will the right hon. Gentleman explain how much of the £120 million coming out of the Fund will be provided by the contributors?

Mr. Peake: £93 million from employers and employees towards National Insurance payments.

Mr. Jay: The right hon. Gentleman accused my right hon. Friend of bowling wide. But when the right hon. Gentleman refers to the £93 million, is he not omitting the £6 million for industrial injuries benefits, making the figure £99 million?

Mr. Peake: Yes, the £93 million is for National Insurance and there is £6 million for industrial injuries benefits.

Mr. James Griffiths: L.B.W.!

Mr. Peake: I thought I made this quite clear. The Exchequer pays to National Insurance an extra £23 million and into industrial injuries benefits something over £1 million, making approximately £25 million altogether. That is how the figures are built up. There is no deception about them at all.
I now want to quote, so that hon. Members can understand the position in 1951, what the then Chancellor of the Exchequer said in his Budget speech. Yesterday, he was claiming that the £39 million—

Mr. Sydney Silverman: On a point of order, Mr. Speaker. While one can understand the desirability of a passing reference to yesterday's debate, am I right in saying that yesterday's debate was concluded by last night's vote and that today what the House is considering is a Motion for the Second Reading of the National Assistance Bill?

Mr. Speaker: The circumstances are a little unusual. In the course of yesterday's debate the right hon. Member for Leeds, South (Mr. Gaitskell) made some incursions into the finance of the pensions scheme which we have before us today, but he instantly desisted from that course when his attention was drawn to the fact, very properly, because that would have been anticipating today's


discussion on this Bill. But the position is that what was said yesterday by the right hon. Gentleman was relevant to today's discussion, and I cannot exclude further references to it on the Second Reading of this Bill.

Mr. Peake: I am much obliged to you, Mr. Speaker, for that Ruling.
I was about to refer, once again, to yesterday's debate, in which the right hon. Member for Leeds, South claimed that
… at least we can say that when we had to offset the increased expenditure on pensions and other benefits … we found the money entirely out of general taxation.
I thought it as well to compare that statement with what the right hon. Gentleman said in his Budget speech in 1951. This is what he said:
I therefore propose to reduce the Exchequer contribution"—
that is, to the National Insurance Fund—
to an amount which will leave the Fund at about its present level."—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 853.]
He went on to explain that that meant a reduction in the Exchequer payments into the Fund of about £100 million a year.
I hold in my hand the Government Actuary's Report on the National Insurance Bill, 1951, and in view of this claim that the right hon. Gentleman found £39 million that year out of his Budget to help the retirement pensioners, I must quote one or two passages from it. It says:
… the Exchequer supplements"—
that is, the proportion of contribution
are to be reduced from the various amounts set out in … the Act"—
the National Insurance Act, 1946. It was 2s. 1d. for a Class 1 self-employed person—
to a uniform amount for both sexes.… The amount is 3d. for each weekly contribution paid by an employed person, 3d. for each employer's contribution, and 6d. for each contribution by a self-employed or non-employed person.
That is what the right hon. Gentleman was endeavouring to do in 1951.
If we look at the Government Actuary's table on page 7 of the Memorandum on the Bill, we find the following figures set out. In the financial year, 1951–52—which was only part of the full year because these changes were not

to come into operation until the autumn of that year—the reduction in Exchequer payments for the part year was £58 million, and for the next full year £111 million. That was what the right hon. Member for Leeds, South proposed in his Budget of 1951.
In point of fact, he was slightly checkmated because I protested very strongly against the reduction in the Exchequer supplements to these merely nominal figures, and I received some support from the hon. Member for Sowerby. That a trained economist like the right hon. Gentleman for Leeds, South should handle these facts and figures so recklessly somewhat shocks and surprises me.

Mr. Jay: Does the right hon. Gentleman really understand the principle of budgeting which his own Chancellor of the Exchequer works? In so far as reductions were made on payments into the Exchequer of that year, taxation, of course, had to be raised to correspond. If the right hon. Gentleman does not understand that, he does not understand either his predecessor's or the present Chancellor's Budget.

Miss Ward: No right hon. Member understands his predecessor's Budget.

Mr. Jay: If the right hon. Gentleman does understand it, there is no substance in the point with which he is dealing.

Mr. Peake: I should have thought that the House would comprehend the quite simple point that the increases now proposed in insurance benefits will cost the Exchequer about £25 million in next year's Budget, whereas, in 1951, the right hon. Gentleman the Member for Leeds, South saved £58 million on his Budget by reducing, or proposing to reduce, the Exchequer contribution to the National Insurance Fund to a purely nominal figure.
One can, of course, oppose the contributory principle altogether. I want now to discuss the contribution increases of 11d. for National Insurance and a 1d. for industrial injuries. There are some, I believe, who would like to scrap the whole contributory principle, but I do not think that they are very numerous. At any rate, the Trades Union Congress firmly endorses the contributory principle, and, so far as I am aware, the principle was endorsed at the recent annual congress of the Labour Party.

Mr. William Blyton: That was on the long-term basis of the quinquennial review, but the T.U.C. are strongly opposed to the present 1s. increase.

Mr. Peake: I am coming to the point of the 1s. increase. At the moment, I am dealing with the wider point, which is the whole question of the contributory principle as such. Some people, as I say, would like to scrap it.

Mr. S. Silverman: Hear, hear.

Mr. Peake: I gather, from his cheers, the hon. Member for Nelson and Colne (Mr. S. Silverman) and other hon. Members opposite believe that that would be the right thing to do. I will only say that not only was the contributory principle endorsed at the annual congress of the T.U.C. and of the Labour Party, but that not one witness appeared before the Phillips Committee to give evidence in favour of the abolition of contributory pensions. No responsible person, I think, advocates the abolition of the contributory principle. A means test would follow, inevitably to become universal, and the whole proposal would then become quite indistinguishable from a universal system of National Assistance.
If one accepts the contributory principle, there then comes the question: should one accept or reject the particular proposal embodied in the Bill? It is possible to argue that this particular proposal is either excessive or unnecessary; but the principle of an increased contribution has, so far as I know, been very widely accepted. I put this very point to the right hon. Gentleman the Member for Llanelly in the debate that we had on this subject in this House on 21st July. The right hon. Gentleman said:
The Minister asked whether I am prepared to face up to increased contributions. Of course I am. We provided for a much bigger increase when we built up the scheme. I am prepared to face up to increased contributions, but we think that it is absolutely right that not only should there be an increase from the workers but that there should be one from the employers and the State. There should be proportion in this matter."—[OFFICIAL REPORT. 21st July, 1954; Vol. 530, c. 1475.]
That, of course, is what this Bill proposes —[HON. MEMBERS: "No."]—an increase from the employer and an increase from the State.

Mr. J. Griffiths: Since the Minister has quoted me, I will say that I stand by

those words. I hope, Mr. Speaker, in the course of the debate to catch your eye. Will the Minister say why, in this Bill, he has departed from the proportions I established in 1946?

Mr. Peake: I am coming to the question of proportions in a moment. I will deal extensively with them.
In this Bill, we are increasing the Exchequer contribution of the ordinary contribution from 1s. 6d., at which it stands today, to 1s. 10d., that is an extra 4d. from the Exchequer, which can be compared with the corresponding increases required from the workman and from his employer.

Mr. Griffiths: Give the comparison with 1946.

Mr. Peake: I certainly will. It is very nice occasionally to take a flight into the actuarial stratosphere. Much erudite thought and learning can be found in the Quinquennial Report of the Government Actuary, in the Report of the Actuary on this Bill, and in the Report of the Phillips Committee upon this question of contributions. But when we have done that, it is necessary eventually to come back to earth, and to decide how many pennies are required from the contributors and—as the right hon. Gentleman asked me, and I think that it was a fair question to ask when he propounded this same question in 1946—whether the contributors themselves will accept the proposals as fair and reasonable.
There are three quite distinct features which go to the make-up of what the ordinary man and woman pays by way of their weekly stamps. First, there is the ascertainment of what is known as the actuarial contribution; secondly, there is the question of what, if anything, should be added to the actuarial contribution, to provide for the inevitably large deficiencies which result automatically from giving a full rate of pension to persons who have already passed out of insurance and contributed perhaps to only a part of their pension; and for the deficiency arising from persons who have contributed for only 10, 15 or 25 years, when the actuarial period is 49 years—the deficiencies arising, as they arise on a Bill like this, whenever a new rate of pension is introduced and existing contributors are given


entitlement to a pension at a higher rate than that for which they, have been contributing in the past.
Having ascertained what is the actuarial contribution and then having decided what, if anything, should be added to it towards the deficiencies which I have just described, a third question arises, which, I think, we must try to keep separate in our minds. Having found out what is the global contribution actuarily, plus something towards the deficiencies, how should that be divided between the three parties to the insurance scheme—the worker, the employer and the Exchequer?
The calculation of the actuarial contribution involves a great many complicated assumptions. Hon. Members have only to read Appendix 5 of the Report of the Government Actuary on the quinquennial review to see what a very complicated matter this is. It involves forming assumptions about the future trends of sickness claims—which, after all, depend in the long run on whether a doctor says or does not say that a man is incapacitated from work—about the future trend of unemployment, about the future rates of mortality and, perhaps the moat important factor of all in finding out what the actuarial contribution is, about the assumed rate of compound interest at which the weekly premiums paid towards earning pensions are assumed to be accumulating.
This latter is a very complicated factor, but about half of what everybody pays on their weekly sum is the actuarial contribution towards their ultimate pension, and a variation of as little as ¼ per cent. in this assumed rate of interest makes a difference of about 5d. a week on the sum. When the right hon. Member for Leeds, South was Chancellor in 1951 he directed that, instead of the assumed rate of interest fixed by his predecessor, the right hon. Member for Bishop Auckland (Mr. Dalton), which was 2¾ per cent., a rate of interest of 3 per cent. should be assumed for the future.
These sums are not, in fact, funded, so that the whole conception of a rate of interest at which they might be accumulating if they were set aside is a slightly unreal conception, but I would

point out that by changing the assumed rate of interest by ¼ per cent. the right hon. Gentleman increased the notional amount available to spend on benefits by no less than £20 million a year. We have done nothing of that sort on this occasion, and I would add, for the benefit of the right hon. Member for Battersea, North (Mr. Jay), who was at the Treasury when this occurred, that this fact about the reduction in the rate of interest was not made known to the public at the time.

Mr. William Ross: Send a telegram about it.

Mr. Griffiths: Would it not be in the Actuary's Report on the Bill?

Mr. Peake: No.

Mr. Griffiths: Why not?

Mr. Peake: It ought to have been. The right hon. Gentleman is responsible rather than myself. He was part of the Government at the time.

Mr. Griffiths: The Actuary is not a member of the Government. The Actuary sees the proposals in the Bill and it is his duty and obligation to make an actuarial report on the proposals.

Mr. Peake: It was fully disclosed to the House that the assumed rate of unemployment would be less for the future than it had been in the past, but no disclosure was made at the time that the assumed rate of interest, which affects the contribution to a vital degree, was to be changed upwards, thereby releasing additional money for the payment of benefits.

Mr. Geoffrey Hirst: Absolutely shocking.

Mr. Peake: There are two important things to remember about the actuarial contribution. First, it is calculated only for new entrants to the scheme at the age of 16. For entrants to the scheme at the age of 25, as many people were in 1948, the true actuarial contribution should be 33 per cent. higher than for entrants at the age of 16; and for entrants at the age of 35, the actuarial contribution is double what it would be for a new entrant at the age of 16.

Mr. S. Silverman: Does this mean that the assumed actuarial basis of the contribution is only a notional affair and that, in fact, there is no actuarial basis at all for


the contributions? Is it not, therefore, a little misleading to discuss the increases in contributions as though they were justified by an actuarial scheme on an actuarial basis, which, confessedly, does not exist?

Mr. Peake: I thought I had explained that there are three stages: first, to discover what is the actuarial basis of the contribution; secondly, to decide whether we shall add anything towards emerging costs or deficiencies; and, thirdly, to decide how the total will be divided between the three parties to the scheme.
The second important point to remember when we are looking at an actuarial contribution is that it assumes that the pensions and all other benefit rates will remain unchanged for at least: 49 years—and, of course, that is a somewhat improbable state of affairs in a progressive community.
We come now to the second question which I think is posed and with which the House is faced. Should any addition be made towards the emerging costs and the deficits automatically incurred as a result of bringing late-age entrants into the scheme and giving everybody the benefit of every increase in pension rates which is ever made? There is no new principle in what the Government here propose—no new principle at all. The 1925 Act, the first contributory pensions Act, contained an escalator to operate every 10 years to provide something towards the emerging deficiencies. The 1946 Act did exactly the same thing.
There was an automatic increase in October, 1951, of 4d.; this 4d. was to be added over and above the contribution. That was 2d. on each side and 4d. for the self-employed; 2d. from the worker and 2d. from the employer, with nothing, on that occasion, from the Exchequer towards meeting the emerging deficiencies of the scheme.

Mr. J. Griffiths: Would the right hon. Gentleman explain what he means when he says there was nothing from the Exchequer? Surely the Exchequer contribution is provided in the Act?

Mr. Peake: The automatic increases in October, 1951, were to operate only on the workmen and on the employers; there was no extra addition into the fund at that time from the Exchequer. That

was the scheme of the 1946 Act—there was to be something added over and above the true actuarial contribution towards meeting the deficiencies which would emerge.

Mr. Griffiths: These are very complicated matters and the Minister owes it to the House to give a full picture. The 1946 Act contained initial contributions from workmen, employers and the State. The right hon. Gentleman must go back to the beginning. There we have laid down the proportion to be paid by the State by way of weekly supplement and additional payments. I speak from memory about what happened in 1951, but I am sure the Minister does not want to give the impression that the Exchequer made no contribution on that occasion towards the emerging cost. Provision for that is made in the Act. Will the Minister explain this, because it is important?

Mr. Peake: I am sorry that the right hon. Gentleman has not followed what I was saying. All I was saying was that the addition over and above the actuarial contribution made in October, 1951, the 4d., was to be borne by the workman and his employer.
There was, of course, an Exchequer supplement under the Act of 1946—[HON. MEMBERS: "Hear, hear."] We all know about that and I am coming to that very point. I shall very soon be reaching that part of the argument. What I am dealing with now is the addition over and above the actuarial contribution provided by the Act of 1946, for which the right hon. Member took responsibility. What we have done in this Bill is to go further, but upon the same principle. We have added a further—

Mr. Griffiths: Mr. Griffiths rose—

Mr. Peake: We have added a further 6d. to each side over and above the 2d. imposed by the Act introduced by the right hon. Member. The result is an addition of 8d. from each side over and above the actuarial contribution to wards the emerging deficiencies. But as well as the 8d. from each side, there is in this case, what there was not in 1951, an addition by the Exchequer as a whole towards emerging deficiencies—

Mr. Griffiths: It was in the 1946 Act.

Mr. Peake: —which amounts to 2d. That is to say, we are providing altogether in this Bill 8d. from each side of industry—that makes 1s. 4d.—with 2d. from the Exchequer, a total of 1s. 6d., over and above the actuarial contribution towards the vast emerging deficiencies.

Mr. Bernard Taylor: Will the right hon. Gentleman go further back than 1951 and explain to the House the size of the Exchequer block grant? That is very important.

Mr. Peake: The hon. Member is too impatient. I am coming to the Exchequer grant in a moment and will deal very fully with it.
All I want to say about the addition to the actuarial figure is that I am informed by the Government Actuary that it is about half the amount which would be required on the formula suggested by the Report of the Phillips Committee in paragraphs 171 to 173, where it suggests that if any increase in benefit rates were made it would be right and proper to add something to the actuarial contribution towards meeting the inevitable deficiencies.
I now turn to the question which is worrying not only the right hon. Member for Llanelly and his hon. Friend the Member for Mansfield (Mr. B. Taylor), but also the Trades Union Congress. [Interruption.] I have been interrupted a great deal and we are to have a two-day debate. The hon. Member for Nelson and Colne is one of the worst offenders. I have fried to deal fairly and fully with this question, as the right hon. Member for Llanelly invited me to do so.
I come now to the question of the global contribution. Having decided what the actuarial contribution should be and added towards the emerging deficiencies, the question arises: in what proportions should that global contribution be distributed between the three parties to the scheme, the worker, his employer and the Exchequer?
Let us look at the history of this matter. The 1946 Act provided a rate of Exchequer contribution which was one-fifth of the total global contribution. It did so because under the unemployment insurance scheme the rate had been one-third and, under the health scheme, it had been one-sixth. The one-fifth was an amalgam of the proportions previously

contributed for the purposes of health and unemployment insurance. There was no sort of Law of the Medes and Persians about it, but it was arbitrarily fixed—fairly fixed, I think—at one-fifth. The result was a Class I supplement from the Exchequer of 2s. 1d. per employed worker.
The first change came in 1951. The right hon. Member for Leeds, South introduced the Bill that year. His proposal was to reduce the 2s. 1d. Exchequer supplement to 6d. He was going to provide a one-sixteenth Exchequer supplement in place of the one-fifth adopted in the Act of 1946. The right hon. Member for Llanelly was a member of that Government. That was the proposal embodied in the Bill which the right hon. Lady the Member for Fulham, West introduced and moved the Second Reading, I think, on the last day of April, 1951.
What happened in 1951? I protested very strongly at this severe cut in the Exchequer contribution and I got some support, which was very welcome, at that time from the hon. Member for Sowerby.

Mr. Douglas Houghton: The right hon. Gentleman will agree that, although we differed on the method of cutting the Exchequer supplement, we were agreed that a substantial reduction in the Exchequer supplement was possible and desirable at that time?

Mr. Peake: Yes, there is no difference between us there. I protested very strongly against this arbitrary—[HON. MEMBERS: "No."]—reduction in the Exchequer supplement from one-fifth to one-sixteenth.

Dr. Edith Summerskill: Does the right hon. Gentleman recall that the Fund was increasing by £145 million a year then and that it was necessary to transfer £300 million from the Fund to the reserve fund? The Actuary was alarmed about the position. What has the right hon. Gentleman to say about that?

Mr. Peake: No one challenges that at all. What I suggested should be temporarily withdrawn—I think the hon. Member for Sowerby supported me—was the deficiency payments set out in the Act of 1946, which were at that time and, in those circumstances, quite unnecessary.


But I made the strongest possible protest against this arbitrary settlement of the Exchequer contribution at that time.
I was very grateful for the support of the hon. Member for Sowerby and went to the Treasury. There I met; the right hon. Member for Battersea, North who, no doubt, was acting under instructions of the Chancellor of the Exchequer. I pressed him on this matter and we agreed over the table that it should be one-seventh. I should have liked it to be one-sixth, which would have been a better figure as the forecast of unemployment assumed when the Act began had been drastically reduced in 1950–51 and, therefore, the amount was to be reduced. In my view, it would have been fair in 1951 to have settled for one-sixth.
I saw the right hon. Member and got a settlement, although he proposed it should be one-sixteenth, I thought I had done a good job. Like a good trade unionist who is offered three-quarters of his demand, I settled for one-seventh.

Mr. Jay: Would the right hon. Gentleman agree that we all felt—for reasons which my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) gave—that there had to be some reduction in the total Exchequer payments to the Fund? The only difference was whether it should be by way of Exchequer supplement or block grant. It was not a matter of total payment, but in a sense, of book-keeping. If the right hon. Gentleman gave a fair picture there would be less interruption.

Mr. Peake: This is a point about which the Trades Union Congress is most concerned at present. In the Phillips Committee Report we see that the T.U.C. representative said that the T.U.C. would agree to an addition to the actuarial contribution towards emerging costs if the Exchequer proportionate supplement were restored to the figure of one-sixth. I 'believe that since then the Trades Union Congress has declared that it is in favour of a restoration to one-fifth, which was the original figure in the 1946 Act.

Mr. J. Griffiths: It was before, and not after, the Report that the T.U.C. said that. It was in the evidence submitted before the Report was published. It is important to get it on the record accurately.

Mr. Peake: I do not know that there is much dispute about this. As can be

seen from paragraph 173 of the Phillips Report, the trade union representatives on the Committee said that they would agree to something more on the actuarial contribution, provided that the Exchequer supplement was restored to a figure of one-sixth. That is an accurate statement which cannot be challenged.
As a result of my protests in this House, I secured a restoration of the Exchequer supplement from the one-sixteenth proposed by the Labour Government in 1951 to the figure of one-seventh. I should have expected the Trades Union Congress to have sent me congratulations or some token of its respect and affection for the good job which I had done on its behalf. I succeeded in wringing from the right hon. Member for Battersea, North £45 million a year extra as supplement to the Exchequer contribution. And as I left my house this morning, I said to myself:
Blow, blow, thou winter wind,
Thou art not so unkind
As T.U.C.'s ingratitude.
Let us make a few simple comparisons with the 1946 Act to test whether the increased contributions are reasonable. This is how the man in the street will look at this matter. Benefit rates will be 54 per cent. higher than they were in 1946. Contribution rates will be up by only about 33 per cent. The extra new benefits represent an increase over and above the rates current today of 22 or 23 per cent. The contribution rate will go op by only 17 per cent. In 1946, the contribution payable by the worker formed 39 per cent. of his wage packet. After the Bill becomes law, it will form 32 per cent. of his wage packet.
My hon. Friend the Financial Secretary to the Treasury will speak later in the debate upon the further financial results of the scheme, but I should like to give the House an idea of the value of the pensions proposed under the Bill. The capital value of a man's pension at the age of 65 will be £1,050; to a married man, the value will be £2,150. For a woman at age 60, it will be £1,450. The most that anybody, even together with his employer, can have paid into the Fund today is £140, and in 20 years' time the maximum which anybody could have paid into the Fund, with the new contribution rate and together with his employer's share, will be £700 altogether.


That shows what a fine bargain National Insurance still is.
I do not think that people will mind paying the extra 1s.—11d. for National Insurance and 1d. towards industrial injuries benefits. A great deal of sympathy has been expressed in the country as well as in the House with the position of the retirement pensioner and of the elderly people. Most people, I think, will be happy to pay the extra 11d. towards the additional benefits which the Bill will provide. If hon. and right hon. Members opposite vote against the new contributions, ordinary people will say that they are simply playing politics and electioneering.
To sum up—

Mr. J. Griffiths: Will the right hon. Gentleman explain the industrial injuries part of the Bill?

Mr. Peake: I have already spoken about the benefits, and everybody knows that the extra contribution is 1d. The House probably thinks that it has listened to me long enough.
To sum up, the Bill restores the value of insurance and industrial injuries benefits and pensions to the level that we all intended they should command when we settled what they should be in the two great Acts of 1946. Not only does the Bill do that, but it goes much further. It gives to these benefits purchasing power which they have never from the outset commanded and which is, in fact, higher than—in most cases substantially higher than—was considered practicable in 1946. It does all this at a cost in contribution which has, I think, surprised the public by its modesty and its moderation. Even after the new rates have become payable, the contributions will represent, as I have said, a much smaller proportion of the wage packet than the original contributions did in 1946.
The Bill is, therefore, a real attempt to give to the insurance system, which over a period of nearly 50 years has become dear to the British people, a place in our national life which it has never occupied before. Despite the theorists and the critics—and, let me add, the economists—our people remain, and rightly remain, deeply attached to a system which provides them with benefits as of right by

virtue of contributions rather than what they regard as gifts and grants subject to a test of means.
Every year since the National Assistance Board was established, in 1948, I have watched with growing concern the steady increase in the numbers of our people being compelled, through the erosion of their savings and the declining value of insurance benefits and pensions, to seek help on a means test basis. From July, 1948, to the end of 1952, the numbers of people receiving assistance grew steadily year by year. In 1953, the rate of increase was checked. In 1954, there has been—we can all be thankful for it—for the first time a small reduction in those numbers.
As we all know, about two-thirds of those seeking assistance are in the pensioner class. With the passage of this Bill, combined with the growing numbers, on the one hand, now drawing pensions at higher rates earned by deferred retirement and, on the other hand, the progressive growth of occupational pensions schemes, we may, if we can avoid inflation, look forward with confidence to a steady and progressive diminution in the numbers of those dependent upon assistance subject to a means test.
Like the right hon. Member for Llanelly, I have a deep respect for the British people. Like him, I know that they set a high value upon their dignity and pride. It is to foster, preserve and perpetuate these great inherited qualities that is the main purpose of the Bill.

4.38 p.m.

Dr. Edith Summerskill: We all endorse the Minister's peroration, but I only wish that it had set the tone of the whole of his speech. It was most unfortunate that the Minister devoted all this time—70 minutes—to so much detail, which served rather to irritate than to convince even his own back benchers. [HON. MEMBERS: "No.'] That is extreme loyalty, which one might expect. I speak for my own side.
The right hon. Gentleman side-stepped the big issues in this matter by merely mentioning them in his last few sentences. We all agree that the British people are very interested in this matter and are anxious to know what the Minister has to say this afternoon. However, the very


big issues he has totally neglected, apart from mentioning them in the first five minutes. These matters are of great importance, I am sure he will agree.
When the right hon. Gentleman announced that the Government were to introduce this Bill, he will recall that I was the first to congratulate him on expediting it. I know perfectly well the difficulties he has; I know quite well the tug-of-war there is between a Minister of Pensions and National Insurance and the Treasury. I know quite well, also, that when a Minister is in the right hon. Gentleman's position he is desperately anxious to expedite such a Bill as this, and I think that since our last debate, which had to be on another Motion of censure, he has done everything in his power to produce a Bill. Within three weeks of that debate this Bill is before the House.
The right hon. Gentleman was, I think, on the defensive when he opened his speech, and he quite rightly said that this was a Bill dealing only with contributions and benefits. He will recall that in the last year or so we have had three debates initiated by this side of the House. Two of them were on Motions of censure. On each occasion I begged him, pleaded with him, to introduce an interim Measure concerned only with benefits and contributions. I did so because I felt that was what the old people needed. They needed immediate assistance. I said to him, "Leave the big Measure, which we are all waiting for, which you yourself are waiting for, until you have all the information you need."
That was the big Measure which the Minister, quite rightly, said that my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) had promised when he was the Minister, that I promised when I was the Minister, after the first quinquennial review. Then we could have the big Measure. I said, "Introduce an interim Measure. Let us have the big Measure when we can have a full debate." I would dare to say that debate on some of these issues would be non-partisan because they are of interest to the whole country.
Each time I have said that to the Minister this year he has—what is the American expression?—"brushed me if," and said, "I cannot accede to the right hon. Lady's request until I have

before me the quinquennial review and the Phillips Committee's Report." He has done so time after time. Not only has the Minister said that in debate, but Questions have been put to the Chancellor of the Exchequer, and the Chancellor or one of the junior Ministers at the Treasury has said exactly the same thing.
Indeed, I have sometimes been treated by members of the party opposite as though I have been very awkward in asking for a Measure of this kind, and almost as though I was reactionary because I was prepared to wait for the Report of the Phillips Committee before having the big Measure. The right hon. Gentleman knows that is an accurate description of what has happened in the last year or two.
After all this waiting he has come here today to move the Second Reading of this very limited Bill. I ask him, or the Minister who is to wind up the debate, to tell us how the Phillips Committee and the Report of the Government Actuary have guided them in drawing up the Bill. In the light of all this, I do not think that my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) used over strong language when he called the conduct of the Government in this respect "bogus."
I remember that in the last debate I said that the country was being hoodwinked by the Government, and I remember that there was a frightful cry from the other side of the House. Hon. Members opposite thought that was a most indecent suggestion. My answer to them is that we have been told to wait for this Bill for at least 10 months. It will be 15 months before the old-age pensioners get their increased pensions; 15 months from last March. We have been persuaded that we must wait for all these Reports.
Why have I raised this matter? I have a streak in my make-up which always makes it hard for me to say, "I told you so." I have raised it for this reason. I think that the right hon. Gentleman has treated the Phillips Committee in a grossly inconsiderate manner. This Report, which is of tremendous importance, is a rushed report. I am not giving my own opinion only. Let me quote what "The Times," which is generally accepted by both sides of the House as being fair—[HON. MEMBERS: "NO."] I


should qualify that remark by saying that it is accepted as such according to what it says. This is what "The Times" said last week about the treatment of the Phillips Committee by the right hon. Gentleman—for that is. in effect, what it was discussing:
Throughout its report there are signs of unfinished thinking and deficient factual knowledge. This is presumably because of the rush in which the committee, for purely expedient and ephemeral political reasons, was obliged to work.

Mr. J. Griffiths: Who is playing politics now?

Dr. Summerskill: It goes on:
But the report does raise the right questions, even though its varying answers will inaugurate a major debate rather than establish beyond dispute what should be done next.
That is very strong language, having regard to what we have been saying on this side of the House in the last year, and I think that that language is justified.
I am glad to see the Minister of Health here, because he will agree with me, surely, that the Report of the Phillips Committee is not only of political interest or Parliamentary interest. It is of sociological interest. I read the part on housing this morning, and I recognise that the Report of this Committee, a very strong Committee chaired by a man highly respected in the Civil Service, one of our most distinguished civil servants, its findings, conclusions, and deductions would have been used by Governments all over the world.
Indeed, some of our own Commonwealth countries are in precisely the same position as we are, in that they, too, are wondering how to handle the problem of an increasing proportion of aged people. I remember that when I was in New Zealand in 1943 I was told that there was not enough room in the institutions there and that the New Zealanders, whose expectation of life then was the highest in the world, were wondering how they would settle this problem in the future.
The Minister, quite rightly, set up this Committee, of which we all approved. It was very well chosen and it was doing excellent work. What has happened during the last few weeks is this. The Government, having been prodded by us

time after time, and refusing to take the commonsense advice about having an interim Bill like this, to save their face, said to the Committee, "Produce that document quickly."
That is a fact. That must be the truth, because what happened? The Phillips Committee's Report was in the hands of hon. Members the day after the First Reading of the Bill. Yet the Minister told me from that Box in the strongest manner, though I bear him no ill will for it, that he refused to do anything until he got the Phillips Committee's Report. Hon. Members who received their copies of the Report by post got them only last Saturday, and here we are on Wednesday in a debate on the Second Reading of the Bill.

Mr. J, N. Browne: I agree that the right hon. Lady has a point of view, but is it not possible that the Committee's Report is not all she desires because it does not contribute to the atmosphere of electioneering, of which the party opposite accused the Government because they proposed action when they did?

Dr. Summerskill: The hon. Gentleman has made excellent contributions to debates of this kind during the past Session. I myself have heard him. He knows me well enough to know that I would not have said what I have unless I had the greatest respect for the work the Committee was doing. He has only to read its Report to realise that it will be an excellent contribution to the literature we have on the subject.
I am annoyed to think that this fine Committee has been compelled suddenly to bring out its Report so that the Minister should be able to come here and say, "Now I have a Bill and the Phillips Committee's Report as well." That is my objection. I want to ask the right hon. Gentleman how it helps him to frame this Bill. As he has admitted, there are no structural changes suggested in the Bill. He promised us that when this great Measure came along it would introduce structural changes, and we have been waiting for them.
I want to ask the Minister to have second thoughts. I believe that a flexible mind is to be admired. Nobody will criticise the Minister if he has second


thoughts, even after he has made his speech. What has he told the House? He has said, after all the controversy of the last year, "Here is the limited Bill for which you ask." I listened very intently to the right hon. Gentleman for 70 minutes, and the best that he could promise us was that we would have one day's debate on the Phillips Committee Report. But what about the big Bill? Are we not going to have a Bill embodying the structural changes as we have been promised? I would refer the Minister to the great issues which concern the whole country. Are they not to be discussed in this House? Will he not have second thoughts even on Third Reading, and do what I ask?
I would ask the right hon. Gentleman to regard this Bill as an interim Measure and, next year, to introduce the large Bill embodying the structural changes. We are not prepared to rush him. He could even recall the Phillips Committee if he feels that it should have a little more time. I suppose it is not unprecedented for a committee to be reconvened. I know that Sir Thomas Phillips is big enough to say that he would be prepared to act if recalled. I have not asked him, but I just say that from my knowledge of his record at the Ministry of National Insurance. He was the first Permanent Secretary there and a man of high repute.
What are the questions that we want discussed and which we had hoped we might discuss today? What about the future financing of the pensions scheme? The Minister said just now—why I do not know, unless he had the idea that it supported his case, but what case I do not know—that the T.U.C. believe that it should be a contributory scheme and we believe that it should be a contributory scheme. But why should the Minister think that people will not have second thoughts about the financing of a colossal scheme like this?
We are talking about the biggest comprehensive insurance scheme in the world. We are talking about a scheme which other Governments may emulate in whole or in part. We are talking about a scheme which has so attracted other Governments that they have sent their Ministers of Social Security or Social Affairs, as they are sometimes called, to our Ministry of Pensions and National Insurance to in-

quire how we are doing it. A scheme of this kind can be financed in different ways. We have accepted the contributory principle. France has decided to have a differential rate, and other countries have decided on a social security scheme.
It may be that if a full discussion could be had we would plump for the contributory system. All right, but the time has come to discuss it, to analyse it, and to look at it. There might be controversy on this side of the House. [HON. MEMBERS: "Oh."] Is that not what we are here for? Is that not precisely what the nation sent us to do—to debate, to argue and then finally to decide in a democratic manner what is the best thing to do?
The Minister has financial experts behind him and I listen to them with great respect when they go into what the Minister called the financial stratosphere. They may have views on this which are all very interesting to Members of Parliament, to people with different political views and to the nation generally. Therefore, I suggest that on this subject alone we should have a debate.
Then there is the issue of the retirement age. The Minister went out of his way just now to warn the country not to listen to any whisperings there might be from this side of the House. I would remind the Minister that the great Scandinavian countries, with Social Democratic majorities, have decided to raise the retirement age. Again, there might be argument on this. Hon. Members behind me might say that that is all right for sedentary workers, but what about the miner? He cannot do it. From both sides of the House there are varying views which want analysing and looking at. The Minister must not try to run away from it in that way by saying that we must not whisper about these things because we are not going to do anything. Again, I say that this issue should be debated.

Mr. Spencer Summers: Would it be reasonable to infer from the right hon. Lady's remarks on this subject that she has a completely open mind and is willing to be persuaded?

Dr. Summerskill: The hon. Member knows me well enough to appreciate that on all social questions I am prepared to listen. I can assure him I am never prejudiced about anything except about Conservatives like himself.
I come to another point, because I am trying to persuade the Minister—and I am glad the Minister of Health is beside him; I hope he will have a word with his right hon. Friend behind the scenes—

Mr. Ellis Smith: Am I correct in understanding that my right hon. Friend is suggesting that the Phillips Committee should reconsider the situation? If so, will she agree with me that we on this side of the House must not agree to any increase in the retirement age?

Dr. Summerskill: I am not committing myself to anything at the moment. All I am doing is arguing that there are certain aspects of the Insurance Scheme which should be discussed in this House, and I am taking each point and putting the case for it in order to try to persuade the Minister next year to introduce a big Measure so that we can discuss it. This is not partisan. The Minister's speech was distinctly partisan, but I am trying to keep mine on a much higher level.

Mr. Raymond Gower: Mr. Raymond Gower (Barry) rose—

Dr. Summerskill: No, I cannot give way again.
I come to another point, the annual review of benefits. When that was suggested from this side of the House in the past we did not approve of it, but gradually as we saw the scheme working we felt there might be a case for it. The Minister has set his face against an annual review of benefits, but I should have thought that this year itself should have proved to him that an annual review might be desirable. I am thinking of the debates we have had, the controversy over the cost of living, and the different indices he has mentioned. I am also thinking of the Housing Repairs and Rents Act, which might mean an increase in rents for many people. For all these reasons, the Minister should agree that there is a case for debating the question of an annual review of rates of benefits, and perhaps adopting a more tidy method of arriving at these rates instead of pursuing today's haphazard methods.
Now I come to a rather pathetic little creature, the person whom I regard

as the Cinderella of the whole scheme, the 10s. widow. I admit that years ago I had to speak to these women and to conferences of women and explain that, whenever new insurance schemes were introduced, it was inevitable that certain categories did not qualify because in the past they had not made the necessary contributions. These widows have accepted this. Let us recognise the fact that the number of these widows is diminishing and that the few that there are evoke an increasing amount of sympathy from us. I wonder whether in the big debate which we might have we might raise the question of the 10s. widow and perhaps improve her lot just a little.
When I was in the Minister's position, I recall that I discovered a number of anomalies in the Scheme. For instance, there was the question of allowances for dependent children. I remember one case which struck me as pathetic—the case of the mentally defective child who is a child until it dies, a child still at 30 years of age. When the Scheme was framed and we thought in terms of children, we thought that a person was no longer a child at 16 years of age.
I recall that the Ministry was collecting a number of these anomalies. I was told years ago that when this big Bill came we should try to remedy all this by injecting these cases into it. What is going to happen to these cases? When will the Minister have the big Bill for them? That is another strong point for having a big Bill next year. I hope, therefore, that the Minister will regard the present Bill as an interim Measure.
On the question of time, I am not going over last year again—I do not want to weary the House—but really we have had cause for complaint. It is quite indefensible for the former Parliamentary Secretary to the Ministry of Pensions and National Insurance to give a half-promise to the House on 19th March, 1953, that the pensions would be raised and for people now to be told that these increases will not affect them until April or May, 1955. We cannot go back over all that now, but I would remind the Minister that these extra six months to April or May which he has now added will represent a substantial proportion of the remaining life of an old-age pensioner, and that the Minister can do something.
I know as well as he does the time that it takes to print. The reason he gave for the delay is that all these documents need to be printed and that he must have six months in which to print them. Every Minister opposite knows that if he applies pressure to the right quarter, if he wants something very badly and says to his Department that it has to be done, it is remarkable how things are hurried up. I plead with the Minister to try to cut down the six months and hold out a greater hope to the pensioners.
As to the contents of the Bill, I recall that the Bill was heralded by the Government as something which would startle and astonish. I recall that three weeks ago the Minister bent forward, his face alight, and pointed at me and said, "Wait until you see it," and how for a moment I thought that the Bill would be quite remarkable. Later in the evening the Minister of Defence, in one of his characteristic knock-about speeches, knowing nothing of the subject, also said, his eyes alight, "Wait until you see it. You will be surprised." Then the right hon. Gentleman was sent to West Derby, where he revealed that he had already seen the Bill and said, "Wait until you see it."
We have seen it. I expected the Minister to produce a quite stupendous rabbit out of his hat. What is the Bill, after all? Surely it is the very least that the Government can do. I do not want to be unfair, but the Minister was a little inaccurate this afternoon. He tried to trip the House by giving certain figures which he knew people could not immediately confirm, but it happened that there were present my right hon. Friend the Member for Battersea, North (Mr. Jay), who was Financial Secretary to the Treasury at the time and who has a very good memory, my right hon. Friend the Member for Llanelly and myself. Some of us knew that some of these things were being handled by the Minister in such a way that they were bound to deceive.
The right hon. Gentleman charged my right hon. Friend the Member for Leeds, South with deceiving the House yesterday. The right hon. Gentleman said, "Why, we were very generous"; but when he was challenged it was discovered that my right hon. Friend was absolutely accurate. My right hon. Friend

said that in the Bill, all the Government are giving out of the Exchequer is £15 million for war pensions and £10 million for National Insurance. After all the Minister's figures and after he has tried to tell the House that my right hon. Friend was inaccurate and misleading and that indeed the Government were exceedingly generous, I still charge him—

Mr. Peake: The point that I was making, and I am sorry that the right hon. Lady did not fallow me, was that I objected to the right hon. Member for Leeds, South (Mr. Gaitskell) saying that he found £39 million out of taxation when, in fact, he intended to take £58 million out of the National Insurance Fund.

Dr. Summerskill: I must admit that the right hon. Gentleman has mentioned many figures today and that figures of that kind on Second Reading are very confusing to anybody. Any responsible person does not like to jump up and challenge them immediately, but there are certain things which we know very well. The right hon. Gentleman said, "We are giving over £100 million," and one of my hon. Friends called out, "What do you mean by 'we'?" When the right hon. Gentleman said "we," it sounded as if he meant the Exchequer, when in fact he was including the workers.
What precisely is the Treasury, with whom the right hon. Gentleman has had to argue, giving? What is the measure of this generosity? What is this wonderful Bill about which the Minister pointed at me and said, "Wait and see, and then you will know"? The Minister cannot deny that I give simple figures which the House can understand. I do not like to juggle with figures in order to bemuse and confuse. I say that the Government are giving £15 million out of the Exchequer for war pensions and £10 -million for National Insurance.

Mr. J. Griffiths: Is that not right?

Dr. Summerskill: If that is not right, I will give way.

Mr. Peake: May I make it quite plain? There are £25 million going into National Insurance—both funds together-—and there is a saving of about £13 million or £14 million on National Assistance to offset against that.

Dr. Summerskill: The right hon. Gentleman is making his position much worse. He may try to underestimate the intelligence of my hon. Friends, but they are quite capable of adding £15 million to £10 million and making them £25 million, which is the figure the right hon. Gentleman has just given. My figures then stand—£15 million for war pensions and £10 million for National Insurance. I give way and the right hon. Gentleman says, "We are giving £25 million." Certainly 10 and 15 are 25. We are agreed. I shall come to National Assistance soon. We say that in 1951 we gave out of the Exchequer £39 million.

Mr. Peake: Mr. Peake indicated dissent.

Dr. Summerskill: I will come to that. And we did not increase contributions. The benefit rates will be discussed later, but I want to continue with the question of finance, because this is my most serious criticism of the whole Bill. The Government have failed to restore the Exchequer supplement to the pre-1951 level. The right hon. Gentleman sought to explain, by referring to previous Bills, why he had not done so.
The consequence of his action is that the worker's contribution is now fixed at a level which cannot be justified on actuarial grounds. I want to put these figures on record. The total contribution to the National Insurance Fund for the adult man in 1946 was 7s. 11d., and the percentage of the Exchequer supplement in relation to the total contribution was 263. In 1951, the total contribution was 8s. 3d. as against the Exchequer supplement percentage of 16·1. In 1952, the total contribution was 9s. 2d. as against the Exchequer supplement percentage of 16·3. Under the Bill, the total contribution is 11s. as against the Exchequer supplement percentage of 16·6. In other words, the worker is being left to bear a share which is inequitable.
The Minister's answer is, "Well, the Labour Government in 1951 reduced the Exchequer supplement from one-fifth to one-seventh of the total contribution." I will now develop what I said when I interrupted the Minister. It was the only occasion on which I interrupted him, but he did not answer. He suggested to the House that the Labour Party almost raided the Fund. I looked up the 1951 debate yesterday, and I noticed that we

were charged with raiding the Fund. Indeed, I believe the Minister made the charge.

Mr. Peake: No, it was the right hon. Member for Ebbw Vale (Mr. Bevan) who made the charge.

Dr. Summerskill: All right; we were charged. I then said that it was an abuse of language. I wonder what the financial experts behind the Minister—I believe there are a few—would do if they had to advise a Ministry on a fund which was in the condition of this one. I will remind them of the position. It was believed in 1946—certain assumptions were made—that, as the Minister has said, the unemployment rate would be 8½ per cent. and the interest on the Fund would be at 2¾ per cent. The death and sickness rates were also based on the 1942–43 figures. All those assumptions proved wrong. That was not the fault of the Labour Party. I am sure the right hon. Gentleman will agree with that. Those assumptions were arrived at by first-class economists, statisticians and sociologists, people whom Beveridge had collected around him, and others. It is well known that advice upon the scheme at its inception was given by people who were not politicians. As I said, all those assumptions were proved wrong.

Mr. Houghton: They were proved to be favourably wrong.

Dr. Summerskill: Yes, that is so. The unemployment rate was found to be 1–2 per cent., the rate of interest earned averaged about 3 per cent., and the death and sickness benefits were lower. Furthermore, in consequence of that, as I said to the Minister—he did not contradict me—every year there was so much money going into the Fund that it was calculated to be increasing by £145 million per year. The Actuary decided that £300 million should be transferred to the Reserve Fund.
Between 1948 and 1951, the surplus income in the Fund was being lent back to the Exchequer in order to help Government capital investment. We then had the ridiculous position that the Exchequer was paying us what were expected to be deficiency contributions and borrowing the money back from the Fund at 3 per cent. interest. Obviously, the Actuary had to give some advice in that most curious situation, and the Exchequer contributions were cut.

Miss Ward: If there was all that money in the Fund, will the right hon. Lady kindly explain to me why, when the Labour Government went out of office, all who attained pensionable age after 1st October, 1951, were still entitled to draw only 26s. per week pension?

Dr. Summerskill: I would remind the hon. Lady that when the Labour Party came into office—

Miss Ward: Cannot the right hon. Lady answer my question?

Dr. Summerskill: I am answering it. The hon. Lady is asking me a question about the benefit rates. I would remind her that, when the Labour Party came into office after her party had been in power for many years, the old-age pensioners were getting 10s. a week—

Miss Ward: What about the money in the Fund?

Dr. Summerskill: —and not many years before that her party had objected to giving them 5s. a week. In view of the financial situation, we decided not only to increase benefits but also to reduce the Exchequer contributions to the Fund, as the Minister has rightly said, from one-fifth to one-seventh of the total—

Mr. Peake: One-sixteenth.

Dr. Summerskill: —but at the same time we left the contributions at their existing level.

Miss Ward: And the pensions.

Dr. Summerskill: If the hon. Lady looks hard enough at Mr. Deputy-Speaker, I am sure that she will be able to take part in the debate in time.

Mr. Ross: Heaven forbid.

Dr. Summerskill: The Government's present proposals—this is not denied, but it is time it was put from this side of this House in order to explain what our position was in 1951—will mean that employed men and women will be paying more than is actuarially necessary to provide for the benefit which they may expect to draw during their life. In other words, the contributions are helping to subsidise current retirement pensions. We believe that the current retirement pensions should be taken over by the Exchequer, as the 1946 Act contemplated, and the contribution reassessed on the

current risks of those now insured. That is what we are asking for. Therefore, I ask the Minister to reconsider the proposal and to restore the Exchequer grant to the pre-1951 level.
We have also made calculations, and I am willing to give them to the Minister in a simple form. I will tell him what we discovered. If he will restore the Exchequer supplement to the pre-1951 level, on that basis the contribution from the worker under the Bill will be nearer 1d. than 1s.

Mr. Peake: Mr. Peake indicated dissent.

Dr. Summerskill: The right hon. Gentleman need not shake his head. I should not have put this matter before him if I had not been advised by expert accountants.
Hon. Friends of mine will be able to prove to the Minister later in the debate that the 1d. contribution which he is asking for industrial injuries is not necessary. We have calculated that if the Minister restores the Exchequer supplement to the pre-1951 level the actual amount required from the individual will be 1½d. If the 1d. for industrial injuries is deducted, the contribution from the worker will be reduced to ½d. The Minister will agree that this is a reductio ad absurdum.
In view of that, I again ask him to treat the Bill as an interim Measure and not call for any increase in contribution pending a full examination of the Phillips' Committee's Report. I hope I have at least deployed an argument for a full examination, a full and thorough debate and a Bill which will embody all the structural changes which are demanded not only from this side of the House.
I will say something on National Assistance, for this reason: the Minister quite rightly realised when he announced the increased benefits that he should at the same time have mentioned National Assistance rates, because in so many budgets of poor families National Assistance and National Insurance are more or less closely related. What is suggested?
The draft Regulations, which we shall debate after Christmas, provide for increases in the original scale of 2s. 6d. per week for a single person and 4s. for a married couple. When these draft


Regulations are before the House we shall be in a difficult position, because, as the House knows, we shall be unable to amend them. We shall have to accept or reject them. It is for that reason that I ask the Minister to reconsider this matter before Christmas.
I point out to him that we have done a little analysis of what the repercussions will be. Here is my analysis of the situation. There are approximately one million retirement pensioners drawing National Assistance supplementation today. The increase, with National Insurance combined of course, will give the following results. Seventy thousand will get between 5s. and 7s. 6d. per week, 130,000 will get between 2s. 6d. and 5s. per week, but there will be 800,000 who will be only 2s. 6d. a week better off.
Let us look at the position of widows. I have always felt very sorry for the widow who has suddenly—perhaps after many years of married life—to go out and earn her living. She is generally unskilled, and we find that among the lowest-paid workers in the country is a big proportion of widows and married women. They always have the badly paid jobs—let us admit that on both sides. They are exploited chiefly because they are unskilled and because they have devoted so much of their lives to the important job of keeping a husband happy and bringing up a family; then they suddenly find themselves in this strange world.
What is the position of widows? The total number of widows drawing a supplementation is 95,000. Of these, 6,000 will get from 5s. to 7s. 6d. a week, 8,000 from 2s. 6d. to 5s. per week, but 81,000 out of 95,000 will get only 2s. 6d. That is a measure of the Government's generosity.
What about recipients of sick benefit? Let us see what they get. There are 141,000 drawing National Assistance benefits and, as a doctor, I think most of those are the chronically sick, because the people who have some acute illness can generally manage on their savings. So let us think of 141,000 chronically sick and see what their position will be. Eight thousand will get between 5s. and 7s. 6d., 10,000 will get between 2s. 6d. and 5s. and 123,000 of the 141,000 are to get only 2s. 6d.
Can the Minister justify his earlier attitude when he turned to this side of the House and said, "Wait and see what we have." What it really means is that the net result of these proposals is that the very poorest in the community will fare the worst. That is why I ask the Minister to reconsider these proposals and come back with a better Bill.

5.25 p.m.

Mr. Spencer Summers: The right hon. Lady, in opening her remarks, made some rather caustic comments on the use that my right hon. Friend made of his time in introducing this Bill. But I was careful to observe that, although she rose at twenty minutes to five, it was not until a quarter past five that she directed her remarks to the contents of the Bill.
We had the remarkable experience that so difficult did she find it to find fault with the Bill that half the time she took up alluding to the effect of the timing upon the Phillips Committee considerations and the other half attempting to defend the action of her Government in 1948 and 1951.

Dr. Summerskill: Does the hon. Member not recall all those very important aspects of the Bill about which I talked and which, during the course of the year, the Minister said would be raised?

Mr. Summers: That intervention did not carry us very much further. I listened to every word the right hon. Lady said, and all I am saying is that it is a remarkable tribute to the contents of the Bill that we should have had such an evasive reply from the Opposition benches to the speech that we heard from my right hon. Friend.
I do not think the Minister wild misunderstand me if I say that as much credit is due to the Chancellor of the Exchequer for the state of the economy of this country which has made the Bill possible as is due to the Department concerned. There is no doubt that it would be quite a different question from the taxpayers' point of view to face up to the obligations contained in the Bill if there were not the assurance of a very different state of affairs, economically and financially, than existed under the administration of the Labour Government.
I want to say a word or two about some of the suggestions put forward by


the right hon. Lady. Before I come to my particular point, I want to say that I regard it as completely irresponsible for any speaker voicing the views of the Opposition to suggest that a considerable increase in benefits should be accorded without any addition whatever to contributions, for that was the suggestion she asked the Minister to consider.
The critics of the Bill fall mainly into two groups; those who are opposed to the contributory system at all and those who, while supporting the contributory system, find fault with the distribution of the burden among the three parties to the Scheme. I want to make quite plain at the outset that I wholeheartedly support the principle of the contributory scheme, because were that to be abandoned it would at once penalise any form of thrift, because benefits far old age or sickness or unemployment would no longer be capable of being claimed as of right. It would be quite inevitable in the long run that such benefits would be paid only in the face of a means test.
Secondly, there would be a serious risk of all sorts of restrictions on earnings and other matters being imposed in the defence of economy from the taxpayers' point of view if the contributory principle were abandoned. It will probably be found that the critics are more numerous in the other group who, while subscribing to the contributory system, find fault with the distribution of the contribution.
The right hon. Lady complained that the Exchequer contribution was not sufficient and ought to be restored to that greater proportion which used to prevail prior to 1951. I want to advance a few reasons why the 1s. contribution is fully justified, and why it would be a great mistake to reduce that figure for the reasons advanced by the right hon. Lady. It is true that this Scheme is not strictly an insurance scheme, because the proportion from the Exchequer necessary to keep it going is not a constant one. According to the figures supplied by the Actuary, whereas the present proportion derived from the Exchequer is of the order of 13 per cent., in 25 years' time it will have grown to no less than 47 per cent., and if a greatly increased proportion of the cost of such a scheme has to come from the Exchequer—as is thought to be inevitable—we should be extremely wary of cutting down the contributions

from the contributors below the figure proposed in the Bill.
I welcome one increase in the Exchequer contribution which, so far as I recall, was not referred to by the hon. Lady, namely, the increase from one-sixth to one-third of the self-employed contributions, which is now to be shouldered by the Exchequer. I have always felt that under the former arrangements the Scheme had far less attractions for the self-employed than it had for other members of the community. Scores of small shopkeepers and traders should be very gratified that it has been found possible, by means of a proportionately increased contribution from the Exchequer, to put them on all fours with other contributors to the Scheme.
In considering whether the extra shilling is justified, I was interested to note the figures quoted by the Minister, which were that whereas, when the scheme started, the worker's contribution was 3·9 per cent. of his then average earnings, under today's proposals and present conditions, the worker's contribution will be only 3·2 per cent. of his average earnings. That shows that there can be no objection on grounds of hardship.
As I understood the right hon. Lady, she found fault with the Exchequer contributing anything to that part of the Scheme which is levied additional to the actuarial requirement of the entrant at age 16. As far as I can discover from my amateur calculations, the amount which the taxpayer, through the Exchequer, is to provide will take care of only about five years of past payments of those already in the Scheme who are going to benefit from the new rates; in other words, a very small but nevertheless welcome fraction of the additional burden to the scheme made necessary by allowing people already in it to draw the benefits that are now proposed.
There is an even more far-reaching aspect of the question of whether or not the extra 1s. is justified. Hon. Members are familiar with the figures to which the deficit will rise in the years that lie ahead. I suggest that there is a very grave risk that if we do not ask the beneficiaries themselves to contribute substantially to the benefits which they will derive, too much will fall upon the taxpayer and that, in turn, will lead to


the very inflation which depreciated the benefits of the Scheme when it started and nullified its paper value under the Socialist Government. In effect, it did nothing but cheat the beneficiaries into believing that the rates were of some value—as they were on paper—whereas, in terms of buying power, they were being depreciated with every year that passed.
It is very plausible to suggest that beneficiaries should seek to have somebody else pay their contribution for them—namely, the Exchequer. How attractive that would be. But I suggest that if that policy is carried too far the effect will only be to add to the risk of inflation, which, in turn, will depreciate the buying power of the benefits and so, in the long run, do more harm to those whom we wish to benefit than we shall do by asking them to pay a fair share of the total contribution.
It is relevant to compare the approach of this Government to the question of old-age pensions with that of the Labour Government in 1951. An attempt was then made to postpone the retirement age. That attempt was foiled by a very strong rebellion from the back benches on the Socialist side of the House.

Mr. George Thomas: The hon. Member will remember that his own party, led by the present Minister, supported that proposal, and it was a revolt by Labour back benchers which led the Government to change their policy.

Mr. Summers: I am concerned only with the fact that the official spokesmen of the Socialist Party attempted to defer the age at which retirement pensions could be drawn. The outcome was that the higher rate finally agreed upon was to be received only by those born 'before a certain date in October, 1951. We find that the effect would have been that 80 per cent. of those eligible for a pension upon retirement at 65 would have had to wait anything from one to five years before they derived the benefit of the increased pensions accorded to them by the Scheme as it was at that time.
I was very glad to hear the Minister say that he was biased strongly against any suggestion of increasing the age of retirement. No evidence has yet been adduced—at any rate, none is recorded

in the Actuary's Report—to show that incentives to defer retirement have in fact induced more people to stay at work than was the case before. In fact, things have gone on in very much the same way. We know that people do not want to give up work unless there is some good reason which drives them to do so, and to assume that we must provide inducements for people to stay at work when we know that most of them want to anyway is introducing into the Scheme something which is both unnecessary and, financially, very expensive.
This is not the opportunity to go into that matter at any length, and I hope that the time permitted for discussing the far-reaching aspects of this subject can be extended to two days.

Mr. J. Griffiths: I know that the hon. Member is interested in an important industry. Does he hold his view with regard to the retirement age in the case of occupational pensions?

Mr. Summers: I am not quite certain what the right hon. Gentleman means by occupational pensions.

Mr. Griffiths: We are discussing a compulsory retirement age. Does the hon. Member think that no compulsory retirement age should be applied to private pensions schemes, as well as to the national Scheme?

Mr. Summers: I am concerned only with the age at which a person is eligible to draw a retirement pension. I am merely saying that I personally welcome the intimation that the Government oppose the postponing of the voluntary opportunity to retire, for the reasons which I have given.
I agree with this much of the speech of the right hon. Lady. There are very many aspects of this problem which should be debated in the light of the Report of the Phillips Committee, the experience of the past and the various researches undertaken by the Ministry, and it would be very difficult to do justice to that topic in one day. For that reason, I do not wish to take up time on this topic of the age of retirement and other matters which would be very much better dealt with then.
In the meantime, I have no doubt myself that, when a comparison is made between the general approach to this subject of this Government, coupled with the


sound financial and economic foundations which it has created, and the approach of the Socialist Government, there will be little doubt which party is regarded by the pubic at large as more worthy to be entrusted with the responsibility of administering a scheme of this kind.

5.41 p.m.

Mr. Douglas Houghton: The hon. Member for Aylesbury (Mr. Summers) began his speech with a compliment to the Chancellor of the Exchequer and to the Government for bringing the finances of the country into such a state as to be able to bear the heavier charges upon the national economy which this Bill will eventually bring. Is he aware that, up to this moment, not a single penny piece of the block grant provided for under the 1946 Act, representing payments by the Exchequer to the National Insurance Fund, has been spent on pensions—not a penny?
Under Section 2 (3) of the 1946 Act there was a contract by the Exchequer to pay into the National Insurance Fund, in addition to the proportionate grants, a sum beginning at £40 million a year and rising by £4 million a year until it reached £60 million a year, for five years, when the matter was to be reviewed. A sum of £300 million was contracted to be paid into the National Insurance Fund in anticipation of a level of benefits to be paid, and in order to keep the Fund solvent and not a penny piece of that money has had to be spent until now.
Why was that? It was because, when the contributions were fixed in 1946, there was a contemplated level of unemployment of 8½ per cent. of the employed population. In experience, that turned out to be not 8½ per cent. but never more than 2½ per cent., except for a few weeks during the fuel crisis of 1947. Furthermore there was a much lower sickness record in those years than the 1946 Act contemplated, and that happened under a Labour Government, when we were supposed to be underfed and down and out. The happy state of National Insurance finances in 1951 arose principally from these two favourable factors.
Again, the hon. Gentleman, in common with hon. and right hon. Gentlemen opposite, talked about the taxpayer. They always separate the taxpayer as if he were some separate being from all the rest, but if the hon. Member for Aylesbury, as a

contributor, will look in a mirror, he will find a close resemblance to himself as a taxpayer, because one of these days, if not already, he will, I hope, be a beneficiary under the National Insurance Scheme.
All that is in question when we are talking about contributions, Exchequer grants, and all the rest is how the burden of paying for these benefits shall be spread. We know that we have to find the money somehow, because there is nowhere else from whence it can come. Insurance benefits have to come out of the national product year by year, and if in any year there is not a national product to meet those benefits, they will be worthless. When we talk about the taxpayers and the contributors, we are talking about ourselves to ourselves, and if we get that clear then we can proceed to the next item on the agenda.

Mr. Summers: Will the hon. Gentleman allow me? He says that we are talking to ourselves about ourselves. Does he not accept the view that there is a level of taxation above which it is thoroughly undesirable in the national interest that we should go?

Mr. Houghton: No. I have said many times before in this House that the level of taxation is what we like to make it if we think that what we want to pay for will be worth it. When it is a matter of defence, hon. Gentlemen opposite say that it is worth paying £1,500 million, and, therefore, we shall tax ourselves to find it. I am not blaming them; I am merely saying that if we want a thing enough we will pay the taxes to pay for it, and that all we shall argue about is who is going to pay what.
I wish now to come to the Bill, which deals with three matters requiring immediate attention—benefits, contributions, and payments from the Exchequer to the National Insurance Fund—and the greatest of these is benefits, because they constitute the human end of this long and complicated story, which was the subject of such unscrupulous wizardry in handling the facts and figures by the right hon. Gentleman. When the Minister said, on 16th November,
It would be a simple act of justice, we believe, to give back to the pensioners, at any rate, the value which their pensions bore in 1946,


we now ask whether he has done it? What was the 1946 standard? It was the poor relief standard of 1938 cooked up into 1946 prices. The 1946 standard was the 1938 standard of existence in cost, but not in comfort.
In fact, even now, with all the self-congratulation going on on the benches opposite about the benefits in this Bill, they are not yet on a subsistence standard. The Minister himself, on 16th November, also said this:
I do not think there is any contention about that between either side of the House, bait hardly any organ of public opinion seems to realise that the insurance pension, since its inception at the 10s. rate in 1926, has never been sufficient for the average pensioner to live on unless he had some other resources.
That holds true today, and the Minister in rather a grandiose style, even in his speech on 16th November, posed the big issue, because he said:
The question is, on what sort of income do we want these old people to have to rely? And to find the right answer to that is the problem which faces us again today, as it faced us in 1943. Do we want our old people to be dependent on a grant, to get which they must show need, or do we want them to receive an annuity earned by virtue of contributions paid into an insurance fund? That is the big issue."—[OFFICIAL REPORT, 16th November. 1954; Vol. 533, c. 235 and 23".]
What is the answer? We did not hear a word about it today—not a single word about the big issue. What we heard was that these benefits were the 1946 amounts written up by 50 per cent. and rounded off to the nearest favourable figure. It was a purely arithmetical process unrelated to any answer to the big issue. Presumably, then, this is the answer to the big issue, or, at least, it is the Minister's answer, and the question now is whether we agree with it.
I think the House should dwell for a moment or two on the question of benefits—the big issue. The first thing I wish to say about these increased benefits is that they do not take a single person off National Assistance. In addition to increasing the benefits under the Bill, we have also found it necessary to propose increases under National Assistance, thereby revealing, of course, a continuing disparity between what is modest subsistence under National Assistance scales and what is not subsistence under National Insurance benefit.
I want to know what the Minister has to say about the progressive increase in

the percentage of retirement pensioners who are having to apply for National Assistance. In October, 1946, 15½ per cent. of retirement pensioners had to ask for National Assistance. That number has increased every year since then, and, without trying to make any party point on this, I say that the percentage increase since the present Government came into office has been almost double the percentage increase which obtained when the Labour Government were in office.
Between 1946 and the date when the Labour Government left office, the number of retirement pensioners who were receiving National Assistance had risen by 2·4 per cent., whereas in the last three years it has risen by 4·4 per cent.

Mr. Summers: Does not the hon. Gentleman agree that as the National Assistance rates are increased, the kind of trend about which he is giving figures is only to be expected?

Mr. Houghton: Is it worth answering that? Of course, if the basis of subsistence has to be put so much above National Insurance benefits, then, obviously, that trend will continue. I am asking the Minister what he is going to do to check it.
We are surely agreed, even now, that the measure of subsistence need is to be found more truly in National Assistance scales than probably in any other measurement that we have at the moment. If the subsistence need, according to the National Assistance Board, is 63s. a week, plus rent, for a married couple, then 65s. National Insurance benefit without a rent allowance cannot be subsistence.
What, then, is it? Is it a Plimsoll line? Is it a national minimum, or is it an up-to-date version of 1946 standards, which were a cooked-up version of 1938 standards? Does the subsistence level of the National Insurance benefit still have its roots in Poor Law conditions of prewar days? Does the Minister propose to put anything into National Insurance benefits which will give us 1954 ideas of how the poor should live? As the wage earner increases his real wages, do we not permit something of that kind also for retirement pensioners?
I know that the Minister, who, I see, has just returned to his place, may say, "Well, these figures are what the T.U.C. suggested." He may say, that they pretty


well tally with what the special correspondent of "The Times" said in that newspaper on 22nd October, 1954. But I would remind the House that both of those suggestions were merely a restoration of the relationship between National Assistance scales and National Insurance benefits as they existed in 1946, which is just another arithmetical adjustment of 1946 standards.
I do not agree with my right hon. Friend that we always agree with what "The Times" says, but I do agree with what I am about to read from it. It said:
The above are not the appropriate rates for next year when, if nothing else, rents will rise markedly.
What is there in these National Insurance benefits for the purpose of meeting the prospective increase in rent? The rent increases under the Bill introduced by hon. and right hon. Members opposite may be offset by increased National Assistance allowances in the case of those who have to go to the National Assistance Board, but those who do not will have to bear the full impact of rent increases. Yet the Minister will go about the country saying, "I have restored the 1946 value of your pension." But he will not have restored the 1946 value of the rents which are to be increased next year.
Of course, there are other people who have made calculations as to what the benefits should be. I see that Richard Denman, in the "Liverpool Daily Post," on 19th July last, tried to calculate on the Rowntree standard. At least he tried to get down to fundamentals, and to build something up from something instead of merely recalculating the standard originally taken in 1938.
I ask the Minister, therefore, are National Insurance benefits permanently chained to 1946 standards? If so, where is the progressive improvement in the condition of our old people to come from, and how does the Minister justify depriving the retirement pensioners of any share in the additional national income which is coming from higher productivity?
I now want to say something about contributions, and I wish to preface my remarks by saying that in moving swiftly to bring relief to the old-age pensioners, we must avoid giving the impression that

we are stopping to haggle about who is to pay for it. But there is nothing that I shall say about contributions which implies any unwillingness on the part of workers of this country to pay increased contributions, whether they think them just or unjust, because they will not let the retirement pensioners down.
I know that in its evidence to the Phillips Committee, the T.U.C. said that it was prepared to contemplate some increase in contributions for increased benefits provided that the Government restored the Exchequer contribution, the proportionate grant, to what it was in 1951.

Mr. Peake: The hon. Gentleman means 1946.

Mr. Houghton: I am much obliged to the right hon. Gentleman. No, I mean before 1951.
The T.U.C. also drew attention publicly to something which the right hon. Gentleman has also mentioned, about the proportion which contributions bear to present wages. There is no doubt that present contributions bear a smaller relationship to wage rates than did the 4s. 11d. contribution in 1946.

Mr. G. Lindgren: On average.

Mr. Houghton: Yes, on average. Figures can prove anything and averages even more. The T.U.C. was trying to be absolutely fair and honest in its evidence to the Phillips Committee, and yet the right hon. Gentleman saw fit to utter those disparaging remarks about the T.U.C. towards the end of his speech.
Until today, I thought that the right hon. Gentleman was a reasonably good man. I am now convinced that he is a bad man, and if he is not ashamed when he reads his speech in the OFFICIAL REPORT tomorrow morning, then he is an even worse man than I think.

Mr. Peake: What were those words?

Mr. Houghton: The right hon. Gentleman will see them in the morning. As the right hon. Gentleman walked out of his house this morning, he said:
Blow, blow, thou winter wind,
Thou art not so unkind
As T.U.C.'s ingratitude.
It is quite obvious that he rehearsed it before he came out.
The big issue here is whether the actuarial contribution, as it is called, is still to be fundamental to the finances of the scheme. This comes to the crux of the matter so far as our attitude towards contributions is concerned. To relieve the Exchequer burden of the growing cost of retirement pensions, an extra amount is put on the actuarial contribution. That is what is loaded up in the proposed contributions under the Bill.
It is curious that though this idea, admittedly not new but revived, restated and recommended, found a place in paragraph 173 of the Phillips Report, somehow or other the proposal to act on that recommendation was in the Bill three days after the Phillips Report was issued. Talking of the Phillips Committee, I certainly agree that it has been unduly hurried in the concluding stages of its inquiry.
The Phillips Committee sat on Thursday, 25th November, on Friday, 26th November, on Saturday, 27th November—and it had arranged to sit on Sunday, 28th November. It signed its Report on 27th November. Why the hurry? Because it had been told that the Chancellor of the Exchequer wanted the Report by Monday, 29th November.
That was the reason. But the Bill had been written by then. This Bill, by then, was in the printing presses of the Stationery Office. Why, then, did the right hon. Gentleman want the Phillips Report on Monday, 29th November? It was just to say that he had got it, and it suited his purpose had it been handed to him in a sealed envelope. He did not even have to open it. He had to say, as he had said so long, "We must await the Phillips Report," He had to say," I have had to wait for it and now I have got it." I think it a great pity that a Committee dealing with such a comprehensive and complex subject had to be hurried to the end of its labours merely to satisfy the political promises of the right hon. Gentleman.
The recommendation in paragraph 173 of the Report is now incorporated in the Bill. The Minister made reference to the fact that two members of the General Council of the Trades Union Congress agreed to that recommendation, provided that, at the same time, the proportionate grant was restored to the pre-1951 pro-

portion. Let me explain that these two members of the General Council of the Trades Union Congress were not, in the true sense, representatives of the Trades Union Congress.

Mr. Peake: Mr. Peake indicated assent.

Mr. Houghton: I am glad to see that the Minister appears to agree with me. They were nominated by the Trades Union Congress, and appointed to the Committee by the Chancellor of the Ex chequer—

Mr. Peake: I hope that I did not fall into error in that respect. I would not for a moment suggest that those two gentlemen represented the Trades Union Congress, but that they were members of the Trades Union Congress.

Mr. Houghton: I fully accept the right hon. Gentleman's correction, but the word he used was "representatives" of the Trades Union Congress. If representatives do not represent, what on earth do they do?
I want to make it clear that those two gentlemen had not whispered a single word of their deliberations to any member of the General Council. I was completely ignorant of the contents of this Report until it was published. Despite the fact that they knew of my close interest in the work they were doing, not one word was uttered to me.
The General Council of the Trades Union Congress has not yet had an opportunity to study the Report. It will no doubt make a statement in due time. It has already made a statement requesting the reinstatement of the pre-1951 proportionate grant, but it has not yet made any statement which supports the loading of the contributions by this extra amount to relieve the Exchequer of its obligations under the 1946 Act.
When the right hon. Gentleman was making such play with what happened in 1951, I was frankly disgusted, I really was. He must remember that he did not dissent from the proposal made by my right hon. Friend the then Chancellor of the Exchequer, that, as the Fund had been running, year by year, millions over the requirements necessary to keep it in balance, owing to the lower unemployment ratio, the lower sickness ratio, and other favourable factors to which attention has been drawn, he did not then


dissent in principle to reducing the useless transfers from the Exchequer to the Reserve Fund.
What he said on 26th April, 1951, was:
What I do take the strongest possible objection to is the reduction to a mere token figure of the propertionate and contractual part of the Exchequer contribution."—[OFFICIAL REPORT, 26th April, 1951; Vol. 487. c. 601.]
That is what he objected to, and, as he has said, I objected to it as well. Eventually, as he said, the proposals under the 1951 Bill were altered so that the proportionate grant, though not restored to its full one-fifth, was certainly put at one-seventh, and other adjustments were made to meet the objection to the principle of reducing the proportionate grant.
But why did not the Minister put that right in 1952, when he had the chance?

Mr. Peake: Mr. Peake rose—

Mr. Houghton: Why has not he put it right now?

Mr. Peake: The hon. Member asks me a question. The answer is that I struck a bargain with hon. and right hon. Gentlemen opposite, and I adhered to it.

Hon. Members: Oh.

Mr. Houghton: So there was a little arrangement over the table between the right hon. Gentleman and my right hon. Friends—though he objected to what was being done. On that basis, why have the Government changed so many things to which they agreed when the Labour Government was in office?
In any case, the restoration of the pre-1951 proportionate grant should have been undertaken by the right hon. Gentleman, and, as he did not do it, why has he been complaining so bitterly about these 1951 events, and rummaging among the dusty skeletons of 1951 to see what he could throw at my right hon. Friend the Member for Llanelly (Mr. J. Griffiths)? In doing that he is as respectable as Satan rebuking sin. He had the chance on two occasions to put it right and did not do so.
He knows that the adjustments made in 1951 were temporary in character and that all should have been straightened out at the quinquennial review. Why has he not done it? "Oh," he says, "I struck a bargain." So the right hon.

Gentleman is an honourable man. Before an exceptional load is put upon contributions for future emerging costs under the scheme we want a thorough examination of how the future of the scheme is to be financed. That, surely, is a fair proposition. In the meantime, the right hon. Gentleman certainly could have restored the proportionate grant to the pre-1951 level.
The Minister also referred to the calculation of interest from 1951 onwards at 3 per cent. instead of the previous 2¾ per cent. That was mentioned as though he were letting drop a dark and dirty secret from the archives of the Labour Government. Does he say that it was wrong to increase the calculation of interest from 2¾ per cent. to 3 per cent. when, at the time, the whole movement of interest rates was upwards? Does he say it was wrong then? Does he say it is wrong now? The right hon. Gentleman mentioned this in the hope that those who did not understand, the ignorant and the politically blind, would say, "Ah, another disclosure about the Labour Government."

Mr. Peake: My complaint was that this was not disclosed at the time. I thought I made that clear.

Mr. Houghton: The right hon. Gentleman, if he thought fit to mention it at all for the purpose of his calculations, could have said, "This change was made, but I agree that it was justly made. I have no complaints to make about it. It so happened that it was not mentioned at the time. I mention it now, but I make no point of it at all." That is what an honourable man would have said.
I now come to the time-table. It is very unfortunate that there is such a long time-lag between the decision of Parliament to introduce benefits and the date at which people get the money. If wage earners had to wait five months for their pay increase, there would be trouble. Old-age pensioners have no trade union and that is why they have to come to us, to see that their grievance is remedied.
Five months delay, of course, is not the whole story, because it takes five months to make up one's mind. The Minister has certainly been five months making up his mind about whether to increase pensions. In fact, he has been


promising to do so for five months. By the time the beneficiaries get these improved benefits, they will be well behind events.
In earlier debates the right hon. Gentleman made a certain amount of political play about how long or how short was the time that was taken by the Labour Government to get these benefits in payment. The present proposal is to give retirement pensioners and widow pensioners these benefits in the last week in April, and other changes at the end of May, and the Minister defends the present time-lag by referring to the slightly longer one in 1951. But this timetable shows no improvement on the 1952 time-table. The right hon. Gentleman can show no improvement on himself, and he can show only a week's improvement on anybody who preceded him.
All this political by-play, these political pranks about the time-table, is merely so much boasting about how hard and how zealously the staff have worked to get this job done. In 1951, we had not got the mechanical devices and machines that are now available to do big jobs like this. I know the right hon. Gentleman is very interested in a robot calculator the name of which is Leo, owned by Messrs. Joseph Lyons and Co. Ltd. It is a wonderful machine. It is probably going to do some of this work. The Labour Government had not got any Leo in 1951. It cost £90,000 to build.
I sincerely hope that the Minister will see that the staff will do their best under him, as they did their best under his predecessors. If there is any failure here, it is due to lack of policy decisions on what risk may be run, on security grounds, in adopting short cuts to get these payments made. Another point is that wage earners ask for retrospection, but administrative difficulties are always pleaded as an excuse for not doing that. I conclude by saying that, notwithstanding the great achievements of the right hon. Gentleman's Ministry, I think it is still a reflection on our Administration that those in need and those whose need is greatest must wait longest.

6.15 p.m.

Sir Austin Hudson: I think that the whole House will agree that the speech to which we have just listened is a useful contribution to a

debate of this kind. The hon. Member for Sowerby (Mr. Houghton) said that figures could prove anything. For my part, I am no expert in figures, and I should like to bring the debate back to the simpler issues.
The House will remember that we have had quite a number of debates on old people during recent months. There were the debates on the two Motions of censure, in one of which I took part, and there were also one or two most useful discussions which we had on Fridays, when the House is not so full, but when we so often get down to very much more common ground than we can in a full-dress debate of this kind.
It has been generally agreed that we should try to do something for the old people at the proper time. I think that, because of our preoccupation with those four previous debates, we have rather forgotten that this Bill deals with matters as well as the old people. The Bill deals with unemployment insurance, which 10 years ago or so would have incurred so much more cost. Thank goodness, since the war unemployment has been practically non-existent. It deals also with sickness benefit, industrial injuries, maternity benefits, and other matters.
It is about the old people, however, that I want to say a few words. This is a limited Bill, and there is no alternation in the general structure of the Scheme. I myself cannot see how the Minister could have drafted it otherwise if he was to get the Bill through quickly. I do not believe that the hon. Member for Sowerby really thinks that the administration can be very much hurried beyond the three or four months laid down in the time-table. From discussions that I have had on this matter, it has never seemed possible to decrease the time without risking a breakdown. The hon. Member for Sowerby was in the Civil Service himself, and he knows how dreadful it would be to have a breakdown and for the whole scheme to be held up. Therefore, we had to have a simpler and limited Bill with the same structure as before, and, if possible, to pass it through all its stages before Christmas.
I do not think we could have had the Bill last Session. It was necessary, perhaps not to wait for the Phillips Report but certainly to wait for the


quinquennial review. I do not see how otherwise there could have been worked out those complicated figures, which I confess I do not understand, on what the contributions should be. I believe that this is the quickest time in which we could have had a Bill.
The Minister said that he wanted to wait for the Phillips Report. I suppose if there had been anything very drastic in it, it might have been necessary to alter the scope of the Bill, but in that case I do not think we should have got it before Christmas. I plead for not one but two days' debate on the Phillips Report, in which there are a lot of interesting topics which we ought to discuss, particularly alterations in the structure of the Scheme.
I should like to pay a tribute to the patience and common sense of the old people, who have been rather bucketed about in the last month, and have been made into a political issue. I have had very few letters about it, but that may be because I have spoken once or twice in the House on the subject, which of course one's local newspaper reports. I think I have had only two letters.

Mr. William Hamilton: Not a telegram?

Sir A. Hudson: Another reason for this is that the old-age pensioner is drawing National Assistance. I have spoken previously on that subject. I always urge these pensioners to apply for National Assistance, because that is what National Assistance is for; but, there is a great disinclination on the part of anybody to go to the National Assistance Board if it can be avoided.
National Assistance involves a means test, which is most unpopular, and a means test results in many people feeling that they are receiving charity. This was, of course, what we endeavoured to prevent in framing the Act, but I am afraid that will always be so. Somehow we cannot get people to understand that National Assistance was designed for just their sort of case, that it is not charity, and that all parties have tried to take it out of such a category.
The pension which we are now discussing is an insurance benefit, received as a right by virtue of contributions, and, of course, there is no question of a means

test. In my opinion there is such a diversity of circumstances amongst these people that some, because of infirmity or for other reasons, will still have to seek the advice and help of the National Assistance Board.
I want to raise an issue which I have raised once or twice before. Perhaps it is a case of my flying a kite which I am always flying. I want to plead that a special department, which could be quite small, should be set up in each borough under the National Assistance Board, or, better still, under the Ministry of Pensions and National Insurance. The duty of the department would be to watch over the welfare of the aged and ageing. It would have no other job. This small department of two or three people would be consulted by the old people, and could deal with such questions as rents and home help.

Mr. B. Taylor: Does the hon. Member realise that machinery of the kind which he suggests is provided in the National Assistance Act, 1948?

Sir A. Hudson: The hon. Member knows much more about this subject than I do, but in my view the old people at present go to the National Assistance Board and simply meet whoever is on duty. I want them to feel that they are meeting someone who is their particular friend. It may be that this is merely an adaptation of something which it was originally intended should take place, but we shall have more and more of these old people in the future, and I urge that suggestion upon the Minister as a future alteration.
I wish to say a word about contributions. I am quite sure that we must maintain the contributory principle. I realise that this extra shilling will add up to a fair sum, both for the employer, especially where he has a lot of workers, and for the employees, but I believe that the benefits which will result make it worth while. I have a note here which reads, "Wages are high," and we have today heard that the new contributions will be a lesser proportion of wages than they have ever been before.
There is a squabble as to what the percentage of the State contribution should be. I am told that if the figure of one-seventh were changed to one-sixth, the difference would be only 1¾d. per


man per week. To state the difference if the contribution were changed to one-fifth, I should have to do some arithmetic of which I am not very capable. The difference, however, is not a very big sum, and I think the Government were probably right not to alter the structure at all so as to get the Bill through quickly.
I will deal, next, with the question of the necessity of having a contributory system at all, because that will be argued. In my view, we must have a contributory system. If not, and if the benefits were all paid out of taxation, we should have one vast National Assistance scheme. As a result, we should have vast expenditure, and it is certain that some day there would be a demand to cut out pensions for those people who obviously did not need them and did not want them.
That would bring us back to a means test again, and I am dead against that. We do not want the contributions to become too great, but I am certain that a contributory system, under which one contributes and is paid a pension by right, is the right method to adopt in an insurance scheme.
I intended to say something about the retiring age, but I will not do so now because many other hon. Members wish to speak, and we shall have another debate after Christmas. I simply want to wish the Bill well, and to hope that it reaches the Statute Book without undue delay.

6.26 p.m.

Mr. Iorwerth Thomas: I, too, will try to be brief, because I am conscious of the fact that this problem is so universal in its character that it has local applications almost everywhere and that many hon. Members on both sides of the House wish to speak in the debate.
I think the Bill is the result of two forces—the dynamic influence of the national organisations which represent the aged in this country and the pressure exercised by this side of the House on the Government in preceding debates. When we examine the agitation in the country by these national organisations which cater for the aged, I think we all accept it as a fact that the basis of the agitation and the content of the demands which have been placed before the Government from time to time have been

that the need of the aged people involved should be satisfied.
I shall not deal with statistics. I want to put them aside for about ten minutes, and to bring to the surface the real problem which faces us. If the Minister and hon. Members opposite agree with my assumption that it was evident to the national conscience that there was a need which required satisfaction, then the test which we must apply to the Bill is whether it has met that national need. In my opinion, the Bill stands condemned because it cannot meet that test. The provisions of the Bill exclude completely the most needy people who are now among the aged population.
We should examine the facts and not be influenced by what is superficial and appears on the surface. The general impression which has been foisted on this House and the country, and will be foisted on the people by the Government between now and the next General Election, is that all these pensioners, particularly the most needy, are to enjoy an increase of 11s. a week.
There are 1,400,000 aged people who depend upon the National Assistance Board for supplementation. The majority of them are the most needy people for whom we have to provide, but this Bill does not provide them with the things they require.

Mr. Gower: The hon. Member knows, of course, that the National Assistance Board can make representations for increasing its rates at any time? It would be impossible and improper for any such increase to be included in a Bill of this kind.

Mr. Thomas: The relationship of the basic rates with the National Assistance scales which have been announced support the main contention which I am putting forward.
The provisions of this Bill are directed towards the distribution, on the basic pension, of an automatic 11s. a week for those entitled to it. I will give a few examples of how it works out, and invite hon. Members opposite to express their opinion on whether, in the light of those facts, they are satisfied with the intention of the Government, accepting for the time being that the Government are really concerned about providing for those people who are in the greatest need.
There are millions whom we can place in the category of superannuated persons. I am not attempting to imply or to argue that the rights those people enjoy should be taken from them, but I would remind the House that the average labourer will be levied on to the extent of 1s. a week. If he could be assured that that 1s. would be directed to meeting the requirements of the most needy he might have satisfaction. In fact the 1s. will go in another direction. It will be directed into channels where there is no need at all.
I do not want to be misunderstood or thought to be suggesting that the rights of these people should be destroyed. The average teacher's retirement pension today is about £6 a week. If he is a married man, he receives £2 14s. in addition—

Mr. G. Thomas: They have paid for it as well.

Mr. Thomas: They have earned these things and they are entitled to them. Under the provisions of this Bill that teacher gets another 11s., bringing his total income to £9 5s. The average retiring pension of a local government officer is £5 a week, and he receives the additional £2 14s., raising his income to £7 14s. He will automatically get the 11s. increase under the provisions of the Bill.

Mr. Peter Roberts: is the hon. Member going to argue, therefore, that these people should not get the increase, or that there should be some form of means test? If so, what should the level be?

Mr. Thomas: If the hon. Member for Heeley (Mr. P. Roberts) was listening carefully—

Mr. Roberts: I can assure the hon. Member that I was.

Mr. Thomas: —he would know that, under the close observation of my hon. Friend the Member for Cardiff, West (Mr. G. Thomas), I said that I have no desire whatever to deprive these people of their earned rights.
The point I am trying to make is that moneys are to be collected from widows and, as the hon. Member for Wolver-hampton, South-West (Mr. Powell) said the other day, it is nothing more nor less than a poll tax on wages. The example

of the teachers and local government officers could be extended to the police, firemen, and the Civil Service. It could he extended to a very wide category of groups of individuals who obtain their superannuation on a non-contributory basis.
Under the present National Insurance Act, in addition to the basic payment of £2 14s. a week, pensioners can obtain supplementary assistance from the National Assistance Board. The National Assistance Board Regulations allow a scale of £2 19s. a week, plus rent. The supplementation received by a married man for himself and his wife would rise from £2 14s. to £2 19s., plus a rent allowance. Such a man's income is £3 9s. per week at present. What will be the plight and tragedy of this group of people under this Measure?
The basic allowance for which the Bill provides will give to that married couple £3 5s. a week. The anticipated scale of the National Assistance Board is £3 3s. a week. Therefore, millions of aged married couples will be entitled to go to the National Assistance Board and obtain the 10s. additional to the £3 3s., which makes a total of £3 13s., as compared with the £3 9s. that they had before. Under the Bill, therefore, the average additional benefit to which these people will be entitled is 4s. a week.
That brings me back to the contrast with the superannuated family unit whose income is already £8 14s. a week. In their case, there is no need whatever, but automatically the hundreds of thousands of these people with incomes of £8 14s. or £6 14s. a week will get 11s. At the same time, the married man and his wife, who, through circumstances beyond their control, are in the position which I have described, will be entitled to an increase of only 4s.

Mr. P. Roberts: Surely, the hon. Member is contrasting one section of persons with another. If he wants to give more to the lower income groups but not to the higher income groups, there must be a means test somewhere. He cannot escape that argument.

Mr. Thomas: I repeat that I have no desire to deprive the superannuated persons to whom I have referred—

Mr. Roberts: That is not the point.

Mr. Thomas: The hon. Member will gee my meaning—of the rights which they earn under the Bill. If hon. Members appreciate the significance of my facts—and they cannot be denied—they will agree that the Bill does not meet this greatest need of all. The House is in this difficulty. Much as we on this side will desire in Committee to provide for those in the lower income groups the full benefit of the basic 11s. which is provided for the others, constitutionally we are not in a position to do so. Even if the Minister himself, as a result of what we have said, desired to remedy the position and to ensure that people on the £3 9s. a week level should get the 11s. equally with people on the £8 14s. level, in view of the forthcoming regulations he is not in a position to effect the alteration.
The regulations, when submitted to this House, are not subject to amendment, but only to acceptance or rejection. Therefore, even if the party opposite were convinced by our arguments, and there were common purpose on both sides of the House, this democratic Mother of Parliaments is prevented from remedying the situation because it has to accept the authority of an ad hoc body outside, the National Assistance Board, which sends the regulations to us for us either to accept or reject.

Mr. Gower: I have tremendous sympathy with what the hon. Member is saying, but what he now advocates is exactly what happened in 1952–53. Then my right hon. Friend brought in a rather small increase of the basic rate, but at the same time the National Assistance Board recommended a rather large increase in National Assistance. The hon. Member for Ince (Mr. T. Brown) will, I think, agree that ever since then the complaint of most old people's organisations has been that they do not desire an increase in National Assistance so much as in the basic rate. That is the very thing that my right hon. Friend is doing in the present Bill.

Mr. Thomas: I agree with the point that the hon. Member makes. But to obtain his objective, the Minister should withdraw the Bill and introduce a larger basic pension to overcome the handicaps and restraints of the National Assistance Board, so far as the unsuperannuated section of the aged population is concerned.
Do not let us forget the aged people and those of them who are in need. Do not let us become concerned merely about scoring debating points and reminding one another of past defections. Let us look upon the problem as it is now, in 1954. If this House is expected to do its duty, the Minister must re-examine his proposals and ensure that to those millions of people in the low income groups, for whom the Bill will mean an increase of only 4s. a week, not only will justice be done, but it must also be seen to be done.

6.48 p.m.

Mr. Raymond Gower: I am glad to have the opportunity of following the hon. Member for Rhondda, West (Mr. Iorwerth Thomas), for in many ways both sides of the House will have great sympathy with what he has said. I wish, however, to reiterate, as I tried to say in an intervention, that in 1952 my right hon. Friend, in conjunction with the recommendation of the National Assistance Board, did the very things that the hon. Member now advocates.
Ever since the implementation of the National Insurance Act of that year, combined with the subsequent increases in National Assistance on the recommendation of the National Assistance Board, the complaint which I have encountered from both of the larger old-age pensioner organisations is that the plight of people of slender means who are not receiving assistance has been worse even than the plight of those on National Assistance. Therefore, the pressure has been mainly for an increase in the basic rate.

Mr. W. T. Proctor: Surely the hon. Gentleman knows that the people who are worse off at the present time are those who are on National Assistance? The Government which he supports and this Bill deal with them in the worst possible manner by giving them only 4s.

Mr. Gower: That is fundamentally different from what I have just suggested. I said that the case made out to me by pensioners' bodies was that the people on assistance were not the worse off; the people who were just above the assistance line were the worse off after the changes of 1952. In 1952 my right hon. Friend increased the basic rate merely by a rather small amount for many pensioners,


but, as the hon. Member for Ince (Mr. T. Brown) will agree, by a larger amount for those who had not benefited by the increase of 1951.
At the same time, on the recommendation of the National Assistance Board, the rates of National Assistance were put up very substantially. Since then, the argument that has constantly been pressed upon me is not what the hon. Member for Eccles (Mr. Proctor) has suggested, that the people on assistance have been the worse off. Though their plight is naturally a serious one, old-age pensioners branches have asserted that it is the marginal people, slightly above the assistance level, who have been decidedly the worse off, drawing on very slender savings and gradually using them up. I reiterate that the pressure brought upon me by organisations of old-age pensioners, not only in my own area but from all over the country, has been for a basic increase in the retirement pension.
There is not power under this Bill to increase National Assistance rates. This Bill is designed to increase the rate payable as of right by pension to old-age pensioners.

Mr. G. Thomas: Surely the hon. Gentleman understands that we have been considering this Bill in the light of the regulations which are to be introduced for National Assistance?

Mr. Gower: Precisely. I am saying merely that, contrary to what some hon. Members have suggested, it is not possible to include in the Bill a Clause for increasing National Assistance. I repeat what I said in an intervention in someone else's speech, what, I think, my right hon. Friend himself has said, that it is open to the National Assistance Board at any time, from year to year, indeed, if necessary, from quarter to quarter, or even from month to month, to recommend to him an increase in the rates of National Assistance, but it is a much more difficult operation, as we shall, perhaps, learn during the next few weeks, to increase the basic rates of the pensions.
Before I had to reply to these interventions, I was about to say that, if politics could be forgotten for a while, I am sure that this Bill would be warmly received in every part of the House. Apart from the honourable exception of

the right hon. Lady the Member for Fulham, West (Dr. Summerskill), a former Minister, the Bill has had a singularly ungrateful reception from the other side of the House. Yet it is strange hon. Members opposite do not receive the Bill more warmly, because it constitutes for the Minister and the Government a great achievement, following, as it does, another Measure which also increased the rates in 1952. This second increase in the lifetime of this present Parliament constitutes a remarkable achievement in view of the financial heritage with which my right hon. Friends were endowed when they took office.
Not only that. The Bill increases practically every National Insurance benefit. I am open to correction, but I believe that the only benefits which are not increased by the Bill are the death benefit and the payments to certain widows who receive 10s. a week.

Mr. B. Taylor: The basic rate of noncontributory pension is not being increased.

Mr. Gower: I am grateful to the hon. Member. I said I was open to correction. Perhaps I was being a bit too sweeping in my assertions. However, with those three exceptions, we can say that the Bill increases National Insurance benefits generally. It increases the basic rate of war pension at all levels; it increases the basic rate of the retirement old-age pension; it increases the industrial injury and disablement benefit; it increases sickness benefit; and it increases unemployment benefit.
Nor are the proposed increases unsubstantial. The increase in war pension has already been described as the best ever introduced. We all admire the wonderful, non-controversial, nonpartisan manner in which the British Legion has always pressed its case. I understand that it will press for a larger figure in future, but, nevertheless, those who direct the fortunes of the British Legion must derive considerable satisfaction at the success which has attended their efforts. The increases in retirement pension are also substantial. An increase from 32s. 6d. to 40s. for a single person represents approximately a 25 per cent. increase. An 11s. increase for a married couple is about 20 per cent. of the previous figure.
I know that these figures do not represent a living wage. Let it never be supposed that they did in the past. The hon. Member for Sowerby (Mr. Houghton) implied that they should. I do not know whether he was implying that they ever have. All those who imply in any way that these pensions have ever represented a subsistence wage, a living wage, render a great disservice.

Mr. B. Taylor: In the absence of my hon. Friend, I must say that I think the hon. Member is misrepresenting him.

Mr. Gower: I am very sorry.

Mr. Taylor: I do not think my hon. Friend said anything of the kind. What he said was that these benefits should be related to the increase in productivity.

Mr. Gower: Be that as it may, I have heard in recent months speeches made at pensioners' rallies and elsewhere which implied that these pensions were of subsistence value in the past and that probably for the first time in our history they have ceased to be of subsistence level under the present Government. Who could suggest that even the new figure of £2, without other assistance, could be enough to live on? Who could suggest that the figure of 32s. 6d. is enough for subsistence or is a living wage? Could hon. Members opposite claim that the amount paid in the lifetime of the Labour Government was enough for a person to live on decently, or that the 10s. paid before that was a living wage, or that the 5s. paid in the early days was a living wage? These pensions have always been designed to assist people in old age. The Labour Government, when they brought in their legislation, rejected the principle that a pension should be adequate for a person to live on decently.
Nevertheless, although they do not represent a living wage, these increases show that we attach some importance to the changing value of our money. Although we do not consider that they should be enough to live on, we certainly think that pensions paid today should progressively improve over the pensions paid when money was more valuable. Those who in any way give the impression that there has been a change in policy, that we have abandoned something better for something inferior, are

not only doing something unwise but saying what is totally untrue.
I agree with the right hon. Lady the Member for Fulham, West that the Bill is essentially an interim Measure. It could not be otherwise. I am certainly in complete agreement with the right hon. Lady on that point, because I believe that this problem will be possibly the greatest social, economic and monetary problem the country will have to face in the years ahead. Yet this problem of old age is not one about which we should be despondent. As has been suggested, we need more than a debate on the Phillips Report. We need a longer period for consideration of how we may properly finance a decent living standard for the elderly people.
I am told that at present 64 per cent. of our people are of working age, 22 per cent, of school age and 13·9 per cent. are what we have described as old-age pensioners. In 1901 61 per cent. were of working age and only 6 per cent. of retirement age. In 1973, we are told that it is estimated that the pension population will have swollen to 18 per cent. of our population and our young population sunk to 22 per cent. Put another way, in 1901 there were 10 workers to every pensioner; today there are five workers to every pensioner. In 1973, there will be 3½ workers to every pensioner. That represents the immensity of this problem.
In 1949, the 26s. a week paid by the then Labour Government in pensions cost a total of £176 million. In 1952, after my right hon. Friend had increased the rates, the cost was £314 million per annum and this year, if there had been no increase on the lines suggested in this Bill, I am told the total cost would be £355 million. Worst of all, in 1977 the cost, even without these present proposed increases, would amount to £700 million per annum.
We should not be despondent about it. I am very glad that my right hon. Friend today said that he is disinclined to increase the retirement age. He was wise to say so in order to suppress any rumours to the contrary. The right hon. Lady criticised him for making this statement. She said it was not necessary to suppress rumours of that kind. I think it is. Last Friday night in Cardiff I read our evening paper called the "South Wales Echo," and it carried a


report that the Phillips Committee have recommended an increase in the retirement age. Later that evening, a gentleman whose politics I do not know said to me, "I hear that you Tories are going to make us work longer." I explained to this gentleman that this was not the proposal of the Conservative Government but of an impartial, independent Committee. He said to me, "But your crowd appointed it." I want to emphasise that I have not the slightest idea what this man's politics were, or on what side of the House he would sit if he were here. But the House can see what was his reaction to a newspaper report.
While I agree with my right hon. Friend that it would be undesirable in any way to alter the age at which a person now may voluntarily retire, I believe we could do more to induce people voluntarily to work longer. The Report reveals that, with the modest incentives which people now have, there has been an average retirement age of 67 instead of 65. So, with our modest incentives—and we know how modest they are, because if a pensioner earns even a very small sum his pension is affected—there has been an increase of two years in the average age of retirement. I believe that if we increased those inducements and allowed these old people to earn a little more without affecting their pensions, they would voluntarily work a little longer. That could be achieved without in any way contemplating following the recommendations of the Phillips Committee.
Finally, whether this scheme is financed out of contributions, out of taxation, or out of both, I believe that the real remedy for the problem is increased productivity. It has been calculated that we shall have to increase our national productivity regularly each year up to 1970 by some 2 per cent. to he able to afford the pensions we are now paying without the proposed increased rates. It is quite immaterial how it is financed, for ultimately it comes out of the national Exchequer and is a charge on industry and on the working population.
Our remedy is increased productivity. In an interjection, the hon. Member for Cardiff, West (Mr. G. Thomas) said something about our great resources, the new

inventions and the atomic energy which are at our disposal. I agree with him. Let us not be despondent about the immensity of the financial problem. Finally, viewed in this background, this is a considerable Bill, although it is an interim Bill. It does a certain amount not merely to help retired pensioners but to help people who receive so many of the other benefits—those not merely affected by old age but who are victims of sickness or injury in industry. As such, it is an addition to the Welfare State, which all parties in the House and in the country have done so much to create.

7.6 p.m.

Mr. Tom Brown: I desire to detain the House for only a few minutes, but I want to make one or two observations upon the speech of the Minister. I have never listened to a more clumsy, blundering statement on a Bill than he made this afternoon. I had better be frank. I have no hesitation in saying that he did not reach his normal standard in presenting this Bill.
I do not understand why the Minister went back so many years and told us what had been done in the past. We are dealing with a present-day situation. One thing I admired in his speech was his remark that he would never bring himself to be a party to raising the pensionable age. That was a very admirable statement, which has been reiterated by the hon. Member for Barry (Mr. Gower). I hope he keeps his promise.
This Bill, in addition to its imperfections, contains the seeds of industrial discontent—I repeat, the seeds of industrial discontent—because of the inequality of the charges made upon the contributor, the employer, and the Exchequer. The Minister made reference to what was being granted or transferred from the Treasury to the Insurance Fund. He called attention to what was done in 1951. I know there was a great deal of cross-chat about whether he had given the correct figure or not, but I find that from 1948 down to the present moment, the Exchequer grant to the National Insurance Fund has been a diminishing quantity. Down, down, it has been going, and today it is less than it has been since 1946.
I have taken the trouble to find the exact sums that were transferred from


the Exchequer to the National Insurance Fund in the financial year ended 31st March, 1951. That is done under two Sections of the 1946 Act, as the right hon. Gentleman is well aware. Under Section 3, in 1951, the total was £95,750,000; under Section 2 (3, b) it was £44 millions, a total under the two Sections of £139,750,000.
If we examine what has been transferred under those Sections—there are no other Sections under which the grant could be transferred—we find that the block grant has been declining considerably ever since. The industrial contributor will say, "If you are going to reduce the Exchequer grant to the National Insurance Fund and at the same time increase my contribution, I shall have a grouse," and it will he a justifiable one.
During the whole of my industrial career I have never found a worker, particularly in the mining industry, who was not prepared to pay his fair share to help his less fortunate brethren. Indeed, workers are always ready to come forward and do so. But does the Minister think it is fair to reduce the block grant from the Treasury to the National Insurance Fund and at the same time increase the contribution of the insured worker? Does he honestly think it fair and just?
We have heard a great deal about increased productivity. We all welcome it. We on these benches welcome it as much as hon. Members opposite do, because we know that our people will get the benefit of it if the results are equally distributed. Who is responsible for the increased productivity? Is it the Cabinet? No. Is it the Ministry of National Insurance? No; we do not expect the Ministry to be responsible for it. But the Government are regularly telling us about increased productivity.
The people who have been responsible for our increased productivity over the last few years are the sons and daughters and grandsons and grand-daughters of the old-age pensioners, the men, in the pits, in the mills, on the land, and in the engineering shops. Yet the Government say to them, "Increase productivity, and pay a larger contribution," while the Exchequer has been contributing a diminishing block grant. That is not fair play. I beg the Minister to lock at the problem again.
We have heard a lot about the National Assistance scales being increased, and we welcome it. However, a remarkable thing has happened this time. I am curious to know why the National Assistance scale, which is to be increased by 2s. 6d., is below the basic pension rate. Last time it exceeded the basic pension rate. I do not know the reason for this change, and I should like the Minister to tell me why he has not advanced the National Assistance scale to the level of the proposed increase basic pension rate.
1 am also forcibly struck by the fact that the National Assistance scales are to be increased as and from 17th February whereas the increase in the basic rate of pension will be made at some date in April. If we assume that every person now in receipt of supplementation gets the 2s. 6d. increase, when April comes along they will get the increased basic pension rate and that will prohibit their continuing upon National Assistance. That is another matter about which I should like some explanation.
A great deal has been said about the basis on which the National Insurance Scheme should be founded. I believe that the contributory basis is the right one, provided that the contributions are equitable, and that the State, the worker, and the industry employing the worker pay their share. I cannot bring myself to accept an extra charge of 1s. for the worker at the same time as the block grant from the Treasury is diminishing. It is not fair play, and I beg the Minister to look at that matter again.
The hon. Member for Barry expressed the hope that this will be an interim Measure. I wholeheartedly agree with him, but we have had no assurance from the Ministry that it is not permanent. I hope that the Minister will give us an assurance on this point. I foresee a very grave danger in that when we come to discuss the Phillips Committee's Report in its entirety, with all its ramifications and complexities, we may find that, because the Bill has reached the Statute Book, we are prevented from making recommendations on the basis of the Report.
We want our position to be safe-guarded. I should like an assurance from the Minister that we shall have an


opportunity, perhaps early next year, to discuss the Report, and that the passing of the Bill will not preclude our having further legislation based upon the Report.
The benefits are an improvement, but they are an improvement to people who have been suffering and waiting for a considerable time. No one knows better than I do, except those in the Department, the difficulties of administration, but I beg the Government, in the interests of those who have waited so long and suffered so much because of the rise in the cost of living, to leave no stone unturned, but at once to put into operation the machinery for changing the pension books so that some relief can be given as quickly as possible.
I promised not to speak for more than a few minutes, but, as hon. Members will appreciate, this is a subject near to my heart. That is why I beg the Minister to expedite the machinery and to bring the Bill into operation as soon as he can. When we reach the Committee stage, I hope that he will take a little notice of those of us who understand the problems of the working people.

7.20 p.m.

Mr. Kenneth Thompson: I am sure that there is no one in the House who has listened to this debate who would not share the sentiments of the hon. Member for Ince (Mr. T. Brown). We recognise him as one who both knows and understands the problem of the old people. We all feel that every effort should be made, both during the Committee stage of the Bill and during the operational processes in the Department concerned, to carry this Measure through as expeditiously and as efficiently as possible so that the increases may reach the beneficiaries with as little delay as possible.
This is not the first debate in which we have engaged in this House on the needs of old people. It is at least the third within recent months. I have been interested to observe the trend of the speeches that have been made from the other side of the House in the two previous debates, which were both by way of being on Motions of censure on Her Majesty's present advisers, and in this debate, which is the Second Reading of a Bill which on the face of it provides

all the answers to the complaints made in the censure debates.
I have read a share of the Press comments that have appeared since the Minister published his White Paper containing these proposals. I read with particular care and interest the observations that have been made by what I might call, without offence, the opposition Press on the details and principles of the Bill.
I was at first puzzled to know what line the opposition of the party opposite would take. Here was a Bill designed to give, as quickly as possible, a very large increase to a very large and very deserving section of the community; designed to do it on as broad and sweeping and generous a scale as possible, and designed to do it in a way which would involve my hon. Friends—and I cannot help hoping hon. Gentlemen on the other side of the House—in working as late as necessary in this Chamber to get the Measure on the Statute Book before Christmas.
It was a puzzle to me, simple as I am, to know on what line the party opposite could possibly resist the Bill, and what line could possibly be pursued in this debate on the Second Reading of the Bill by hon. and right hon. Gentlemen opposite. I am very relieved to discover that I am not the only one who was puzzled to know on what line the Opposition would go. If I was puzzled in the matter, it is perfectly clear to the world, and certainly to the Members who have sat through the debate so far, that everybody was puzzled as to how opposition to the Bill should be conducted.
We have had every possible shade and variety of damning by faint praise, pure and simple misrepresentation, straightforward obstruction, and a good deal of abuse by hinting by the various Members who have spoken. It is evident that there is a good deal of confusion on the other side of the House about what they really want.
The criticism that has come from the benches opposite was exemplified by the speech of the hon. Member for Rhondda, West (Mr. Iorwerth Thomas). He spoke about the plight of the old-age pensioner, obliged by reason of his or her circumstances to apply for National Assistance supplementation. We all know these cases, and meet them in our regular work


in our constituencies, and many of us on this side of the House, not least myself, know them among our personal friends and family connections.
The emphasis and purpose of the hon. Member's speech was that the Bill should have been concentrated on the needs of those people and only on those people. He does not begrudge other pensioners having increases in their pensions too, or begrudge school teachers having pensions when they retire from their honourable and not very generously paid profession. But his main concern was the old-age pensioner who required, by virtue of the circumstances in which he lived, to apply for National Assistance supplementation.
During the two Motions of censure debates, there was barely a mention from that side of the House, either from the right hon. Lady the Member for Fulham, West (Dr. Summerskill), or anyone following her, laying particular emphasis on the old-age pensioner needing National Assistance supplementation. In other words, in a debate on a Bill to satisfy the just demands and the present needs of the ordinary old-age pensioner, the great majority of those who have retired and who draw their National Insurance pension as of right, the party opposite has now completely shifted its ground. That is sufficient evidence that what we are doing in the Bill, so far as the great majority of old-age pensioners are concerned, is right and reasonably generous in view of all the circumstances of the case.
But there has been another form of attack on the Bill by the party opposite, concentrated on how divisions should be made between the various people who contribute to paying for these not ungenerous benefits. It has long been suspected that the party opposite did not really believe in the insurance principle. Even if those who led the party in the past, or lead it today, felt that a contributory scheme was essential, they nevertheless hoped that there would be enough smoke and cloud over the issue to enable them to get the benefits of both worlds by being able to insist on a contributory scheme in this House and by being generally supposed to believe in a scheme financed by direct taxation.
We have adequately, and I hope finally, cleared up that one point this afternoon—that the party opposite is committed, if committed is the right word, to a contributory scheme for the financing of pensions payable under the National Insurance Act.

Mr. T. Brown: Provided it is equitable.

Mr. Thompson: So long as we know, and the people know, that this House as a whole—at present but not necessarily for ever—is committed to a contributory principle for National Insurance pensions, then we have got somewhere. At any rate, we have cleared up one of the issues designed to confuse the electorate.
The question is not merely whether pensions should be made payable by virtue of contributions or through direct taxation, but also where the emphasis is to fall between the insured, his employer, and the taxpayer. The hon. Member for Ince was troubled about that emphasis, but I do not think that he can have heard the very entertaining and instructive speech of his hon. Friend the Member for Sowerby (Mr. Houghton), who has now been compelled to refresh himself, as I hope to do at not too far distant a time. He said that if a contributor, or any citizen in his role of contributor, were to look into the mirror, he would see himself there in his role as a taxpayer.
That is true not only of a few. It is true not only of the rich. It is true of the miners, the dockers, the piece-workers in industry, and, indeed, the great majority of the ordinary people. We are not shifting the burden from ourselves to somebody else by suggesting that a 1d., 2d. or 6d. of this 1s. should be contributed by the taxpayer. That would simply be transferring the paying from one pocket of one's trousers to another. Until this simple fact is accepted by hon. Members opposite, we shall continue to get a confusion of thought on their part and in the minds of the people they claim to represent.
It is simply, basically and essentially, true, and it must become increasingly true—if that is possible—that the taxpayer and the contributor are essentially one and the same person. The responsibility for providing these benefits cannot be shifted from the contributor on to some obscure, remote, unidentified, and


anonymous taxpayer who does not exist except in the person of the contributor himself.
Having established that fact, the other arguments have no real relevance. Everything harks back to the speech made by the hon. Member for Sowerby, namely, that this is a simple proposition—that those who want these benefits, either for themselves when their time comes or for their fathers and grandfathers who are alive today and are drawing them or are about to do so, must remember that the ordinary people are the only ones who can provide them. With that thought in mind, I hope that this House will give the Bill a Second Reading without further delay, and will allow it to proceed through the Committee stage without unnecessary Amendments, alterations, and attempts to hold it up.

7.33 p.m.

Mr. William Blyton: I hope that the hon. Member for Walton (Mr. K. Thompson) will forgive me if I do not follow him, but leave him, instead, to the confusion which he says is apparent among hon. Members on this side of the House.
I heard one hon. Member opposite say that he regarded the Bill as an interim Measure. I regard it as quite the opposite. If this Government are returned to power at the next Election, I believe that we shall see established the basis of a financial structure which will prevent us, in the debate on the quinquennial review, getting what we were promised under the 1946 Act. It will prevent us from amending that Act and removing the anomalies in its operation which we have discovered by experience.
The Tory idea is that the people least able to bear it are to carry the weight of the cost of old-age pensions, which ought to be carried by the Treasury. We have been promised a debate on the quinquennial review, but no promise has been forthcoming from the Government to review the 1946 National Insurance Act or the National Insurance (Industrial Injuries) Act, though Sections 39 and 40 of the former Act clearly indicated that that would be necessary. This Bill comes to us, not as an interim Measure, but as one that will establish the financial structure for the next five years.
There are many problems which we have come to appreciate through our

experience of the operation of both these Acts. There is the important question of the yearly increase in our expenditure on behalf of the aged, and the question whether old-age pensioners ought not to be brought out of the sphere of insurance and placed upon a Treasury footing by means of a social tax, leaving the other benefits remaining upon an insurance basis.
One thing is certain. As this expenditure grows, we shall be heading towards a contribution which will be too prohibitive for the working people to carry. In a few years' time two-thirds of the payments from the Fund will be paid out on behalf of old-age pensioners. Under the provisions of the Bill the benefits for industrial injuries will not rise to the same extent as will National Insurance benefits, and these provisions are to be carried into effect without waiting for the Actuary's Report.
Forty per cent. of the total number of accidents covered by the Industrial Injuries Scheme affect miners, and we shall take the strongest exception to the procedure of the Government unless we are given an assurance that this is a temporary Measure and is not committing us to the future. It is because we are being ditched over the review of all the Acts that we have protested at the introduction by the Bill of a five-year financial structure. It could have provided for a one-year financial structure, leaving us to debate and review the 1946 National Insurance Act and National Insurance (Industrial Injuries) Act, in the light of the actuarial reports and the Phillips Committee Report.
We also regard the proposed benefits as inadequate both in respect of National Insurance and industrial injuries. For reasons that I am prepared to state, we consider that it is the State's obligation to meet these demands without increasing the contributions of the poorest section of the community.
The Minister of National Insurance has brought to his aid the evidence of the T.U.C. to the Phillips Committee. I might say in regard to the Phillips Report that I think it should be renamed the "Work Till You Drop Report," and I regard the Committee's suggestion for increasing the retirement age to 68 as one of the most reactionary suggestions


made in modern times. Many men work very hard in the coal mines, at sea, in our steel works and factories, and they should be left to decide at the age of 65 whether they are able to carry on working or not.
The matter should be left optional, and people should not be forced to work until they drop before they receive a pension. This suggestion in the Phillips Report is deeply resented by all sections of the community, and I am pleased that the Minister today has come down on the side of people who hold that view and is not prepared to accept the outrageous suggestion of the Report.
The T.U.C. did give evidence to the Phillips Committee, but that evidence was given, not for the purpose of this Bill, but in relation to the Report of the Phillips Committee on the quinquennial review and the long-term aspect of this problem, with a view to the long-term Measure which we are expecting next year. It is sharp practice on the part of the Government to use evidence of this character, which was intended to apply to the long-term problem in the framing of this Bill, when that evidence was given for an entirely different purpose to that which this Bill seeks to achieve.
As the Minister well knows, the T.U.C. laid down certain conditions before agreeing to an increase in the contributions, and those conditions have not been fulfilled. Even in connection with this Bill, on which the Government have brought the evidence of the T.U.C. to their aid, the T.U.C. laid dawn the condition that the Exchequer should meet the growing gap between income and expenditure in the years ahead, and that the Exchequer supplement should be restored to one-fifth—the pre-1951 proportion. They also laid down that there ought to be funding of the contributions of new entrants at the age of 16, and they said that consideration ought to be given to the economic burden of retirement pensions.
Therefore, I suggest to the Front Bench opposite that, before they talk about the T.U.C.'s offer on contributions and bring that to their aid, they should accept the implications of the basis on which that offer was made. It is well known that the T.U.C. are definitely against the 1s. increase in contributions provided for in the Bill. This is the second time in the

lifetime of this Government that the contributions have been increased. They were increased by 7d. in 1952, in order to give half-a-crown a week increase for the pensioners, but it has meant that the contributions of the employers and employees have provided £6 million of the £7 million a year which it cost to pay that extra half-crown a week to the pensioners. What will happen under this Bill will be that people will be compelled to pay in order to keep the Exchequer payment down as the increased cost of old-age pensions emerges in the years ahead.
It also seems to be the Government's policy that young men will have to pay out of their contributions an amount over and above that which is necessary to provide for their own benefits, in order to make a contribution towards the increased cost of benefits to older men and those who have already retired. I think this principle ought to be opposed. The uncovered liability of retired people and those who are about to retire, who have not paid the actuarial value of the benefits they receive, should be an Exchequer responsibility. It should be met out of general taxation. If this does not happen, and if unfortunately we should get a steep rise in unemployment in future years, together with the increased cost of pensions, we shall probably reach the stage when, if the Exchequer does not meet the situation, the cost of the contributions will become prohibitive for the workers to bear. In that case, we shall probably have to face an even higher rate of contributions with lower benefits than are now enjoyed.
I want to say a word or two about contributions. It is evident that the Government Actuary in the last few years has revised his ideas and has found additional money. He has taken the unemployment figure of 4 per cent., instead of the original 8½ per cent., and he has taken interest at 3 per cent., instead of the original 2¾ per cent. He has also taken into account the decreased incidence of sickness, and this has meant that the increase in the contribution is less than was originally anticipated. In fact, he says that the proposed contributions are materially greater than the amount of the actuarial contributions.
The proposed contribution increases will mean that contribution income will


be increased by £116 million, of which £23 million is represented by an additional Exchequer supplement. In paragraph 20 of his Report, the Government Actuary states that £60 million is over and above the produce of the actuarial contribution. This is being done to reduce to that extent the burden that should fall upon the national Exchequer. This will hit very hard the new entrants into the scheme. This £60 million over and above the actuarial contribution is equal to the 8d. and 7d. per week of the contributions of the employees and employers, respectively.
The Exchequer supplement is to remain at one-seventh, and, if it was restored to one-fifth, it would provide an additional £30 million a year. When we come to National Assistance expenditure, dealt with in paragraph 8 of the Memorandum, I see that it is estimated that the savings in National Assistance will probably amount to about £23 million, not the £13 million which the Minister talked about today, so that if £23 million is saved on National Assistance—equivalent to the additional Exchequer contribution to the increased benefits under National Insurance—we see that again the workers will be carrying the whole of the burden of this increase, just the same as they did in 1952, when they had to pay another 8d. on the stamps per week.
In regard to the additional Exchequer contributions, I want to say that in 1951, we had some responsibility in the matter, because we repealed the provisions whereby there would be an annual and increasing Exchequer grant of £40 million upwards to meet the uncovered liability and other matters.
This step has been carried on by the present Government and has resulted in a loss of £132 million to the Fund. If we look at the Actuary's Report for 1951, we see that he says that the cessation of the Exchequer grant was only a temporary measure and that in future years it would again become necessary. There is bound to be an increasing deficiency from the uncovered liability, and the amount paid by the Exchequer will depend largely on the outlook of the Government in power at the time. As I see it, this Government intend that the Exchequer shall not pay for it, but that the young people and those in employment shall carry the burden of this uncovered liability.
To summarise the contributions position, I will take the example of the worker. The Government propose to increase the total contribution to 13s. 8d. a week. The increase of 1s. 3d. a week that is, the 8d. paid by the workman and the 7d. by the employer, should not be used to help the Exchequer finance the annual deficiency resulting from the uncovered liability. Actuarially, the contribution needed is 12s. 5d. a week, and this amount should be found by increasing the Exchequer supplement to one-fifth and not by increasing the workman's and the employer's contributions.
No proposal has been made by the Government to increase benefits so as to take into account the increase in productivity. These increases in benefit should, in my opinion, have been found by increasing the Exchequer supplement to one-fifth and by paying back into the Fund the £70 million saved on this since 1951.
Another word or two about benefits. As my hon. Friend the Member for Sowerby (Mr. Houghton) said in his brilliant speech today, these benefit rates have not taken into consideration the fact that rents will go up. Therefore, we must not be surprised if when rents go up by 4s. or 5s. a week there is a great agitation by people in receipt of fixed incomes, because such an increase in rents will depreciate the benefits embodied in this Bill.
The Bill does not take into consideration those widows who are in receipt of 10s. a week. Surely this diminishing class of pensioner should be brought within the scheme. Their 10s. rate was fixed years ago and has not the value today which it had when it was fixed. It is time that the discrimination against this class of pensioner was ended. Then, again, the 1914–18 war widow ought to be brought into the same picture as the widow of the last war.
When we come to National Assistance scales, we see that there are thousands of people who will still be on National Assistance even when the new scales of benefit are put into operation. They are the people who in the inter-war years faced unemployment, low wages and the bringing up of their families under the most harassing conditions. They were unable to save anything in those interwar years.
How are they to be treated? If they are married, they will receive an increase of 4s. a week provided that they pay a rent of 10s. a week, and, if they are single, they will receive 2s, 6d. a week provided that they are responsible for paying the rent of the house. In many cases, the sons and daughters of such people will be paying the extra 1s. a week in order to provide their old folks with a miserable pittance.
I now come to the question of industrial injuries. As I have said, 40 per cent. of the accidents occur in the mining industry. There are many things that need rectifying in the light of the experience of the operation of National Insurance (Industrial Injuries) Act. There are the old compensation cases who before the passing of the Act had, and indeed still have, only 55s. a week. Are those people to be forgotten men? Cannot they be allowed to come within the scope of this Bill by opting to do so?
What about the determination of partial disability? The present scheme of percentage loss of faculty based on the Royal Warrant does not meet the requirements of the great variety of accidents in the mines and in industry. In the matter of pneumoconiosis and silicosis, we are still far from satisfied with the percentage disability allowed to these men. The same applies to pelvis fractures and to disabilities arising from broken limbs.
If the rates of benefit under this Bill had gone up above the 1946 level in the same proportion as have the rates under the basic National Insurance Act, then the benefit should be 69s. and not 67s. 6d. Here, again, the Government Actuary says that this Fund will have to pay for the uncovered liability. It is not equitable that existing contributors should have to pay for the benefits of older men and of those already in receipt of such benefits. Here, again, the situation should be met by the Exchequer supplement being increased to one-fifth.
The special hardship allowance is to be raised from 20s. to 27s. 6d. a week. We cannot accept this unless an assurance is given that this is only a temporary measure. In order to give help to the aged—who ought to have had the increase early this year instead of next year—I shall vote for the Second Reading of the

Bill in the hope that I shall be able to argue in Committee the points which I have outlined.
When I think of what this Government have done for the brewers, the road hauliers, the landlords, the steel barons, in the way of tax reliefs for industrialists and by a reduction in the Profits Tax and the abolition of the Excess Profits Tax, and of the rake-off that the bankers have enjoyed, and when I think of the statement made by my right hon. Friend yesterday about the increase in profits, dividends and capital gains backed by the Government Front Bench, all I can say is that the worker is now being made to pay for pensions and for industrial injury payments because of these benefits bestowed on people who are not in need.
The old-age pensioner and the man who is sick or who is in receipt of compensation have had a raw deal. Many of the old-age pensioners will never receive the increase as they will have passed on before it is paid. Thousands will face a cold winter and the high cost of feeding themselves with no help forthcoming. The Tories have once again run true to form. They are making the people least able to afford it carry the burden. They have fixed a financial structure in this Bill which is intended to prevent a review and any amendment of its provisions by hon. Members on this side of the House.

8.0 p.m.

Mr. J. N. Browne: In spite of a little electioneering on the last page, the House has listened with great attention to a sincere and well-informed speech. The hon. Member for Houghton-le-Spring (Mr. Blyton) apparently felt that we were in some way jeopardising our right to a full review of the quinquennial review Report if we pass this Bill. I do not take that view at all. The Minister has been quite right to take the fabric of the Scheme as it is, and to build on it. We shall not be prevented from discussing matters in any way we like in the forthcoming debate after the Christmas Recess.
There is one remark which I should like him to withdraw. He called the Phillips Report the "work till you drop" Report. I disagree, myself, with the particular recommendation he referred to, but I do not think we should seek to


tag that sort of label on to a Committee which is impartial, and which has done everything it could to arrive at the right conclusion.

Mr. Blyton: If the hon. Member has read the Report he will find that a man would not get a pension unless he was sick or unable to work. What else could such a Report be called?

Mr. Browne: I have read the Report, and if the hon. Member will read it again he will see that it does not go so far as that. I do not like these labels put on reports, and I am sure that most hon. Members will agree with me.
The hon. Member for Sowerby (Mr. Houghton), whom I am glad to see in his place, said that we, on this side of the House, now had a "Leo." After listening, not to him, but to many of his hon. and right hon. Friends, I hope that we shall have a whole pride of "Leos" before they have the chance to use that machine.
He raised the question of the subsistence standard. He said that the present level was not a subsistence standard, and said, quite fairly, that the N.A.B. level was only a subsistence standard if the rent element was included. He asked what the right level is. Surely the right level is what the country can properly afford. No other line can be drawn. We could not possibly bring everyone up to the total of the highest, plus rent, N.A.B. scale; neither do we want the pension to be as low as it is at present. It was an interesting point, but that seems to me to be the answer.
He also said that the benefits in the Bill will not take anyone off National Assistance. That is not true. Surely, although the number may not be large, some of them will come off. Does he really think that it will not take off anyone at all?

Mr. Houghton: I said that I did not think that, with the upward movement of National Assistance rates, anyone would be taken off National Assistance when the two scales were in operation.

Mr. Browne: My view, and my information, is otherwise: but we shall see what happens.
The last of his points which I wish to mention was also raised by the hon. Member for Houghton-le-Spring. That

was that the new scales did not cope with rising rents, because the new scales only restored the 1946 standard. Of course, the new scales do a little more than that, and therefore some element of increased rent is allowed for in them.
The right hon. Lady the Member for Fulham, West (Dr. Summerskill) chided the Minister for this being a tardy, interim Measure. She really did not state the position quite as clearly as I would have hoped she might. She complained about the contributions. She said that because of a new policy that contributors should only get the benefit in accordance with what they had contributed, or, to put it the other way, should not contribute more than the benefit relating to their contributions, there should be no increased contribution at all relative to the new scales. I hope that I have understood her correctly.
Had she come to the Box and said "I do not like the one-seventh. I should like one-sixth, which is 2d. off, or one-fifth which is 4d. off," that would have been an argument which could have been sustained. But what is she doing? She is striking at the fundamental principle of the 1946 Act, and it is quite wrong, in an interim Measure of this sort—and she admits that it is an interim Measure—to strike at the fundamentals of the Act.
Therefore, her suggestion that there should be no increased contribution at all, though it may be sound—I neither agree nor disagree—must be left to another occasion altogether. I do agree with her when she asks "What about the big Bill—the big debate?" I think that both sides of the House realise that, later, there has to be a very big debate to discuss the many points that will arise.
One notable omission from nearly every speech has been to say "Thank you" to the Minister—

Mr. Blyton: For the people he is forgetting?

Mr. Browne: For a very fine Bill indeed—to say "Thank you" to the Minister on behalf of old-age pensioners who would have been satisfied with, and who expected to get, 5s. increase. That is what hon. Members opposite led them to suppose they would get from them, and it was the target which we set ourselves. Instead they will receive 50 per cent. more.

Mr. Ivor Owen Thomas: Will the hon. Member explain how much better off will be anyone in receipt of a pension—which is now considered insufficient for sustenance—and who is in receipt of additional payment of 5s. a week from the National Assistance Board? As such people will now receive 5s. additional pension and the 5s. National Assistance payment will cease, how much better off will they be?

Mr. Browne: Half a crown—because that is the increase in the National Assistance.
I must say "Thank you" to the Minister on behalf of all the old-age pensioners who, I am sure, would all agree with me. They are getting more than they expected, and more than they would have had from the party opposite. The credit for the increase is something which the Labour Party can never take from us. It is a credit not only to the Minister but to the whole Cabinet, who have put the nation in such a condition that it can afford to pay these increases.
To my many old-age pensioner friends, I would say "Is not this a better way of getting an increase of pension than by taking the reserve fund?" on which they have looked so often with longing eyes? The reserve fund has been built up by the continued high level of employment. It belongs to that particular risk, and I agree with what the Phillips Committee says, in paragraph 175 of its Report:
… that the balances of the Funds should not be depleted on account of deficits arising from the payment of pensions.
Another thing that I would say to the old people is that I have heard it mentioned in this debate, I have read the Chancellor of the Exchequer's speech of 1951, and I have read paragraph 308 of the Phillips Committee's Report, and disagree with all three in respect to altering the retiring age. I say that I disagree with all three, because I felt that the right hon. Lady had rather an open mind about that. She was not intending to be pinned down by her hon. Friends behind her. But I shall pin myself down until I hear a very good argument in support of increasing the age.
This is an interim Measure. I hope that the Labour Party will not obstruct us and prevent us getting the Bill through for Christmas.

Mr. A. C. Manuel: When the hon. Member says that he hopes the Opposition will not obstruct, he surely does not suggest that we should forgo our democratic right to try to improve the Bill and get better treatment for old-age pensioners?

Mr. Browne: I am glad to see the hon. Member in the House for the first time. No, of course not. If necessary, we are prepared to work all day and all night to get the Bill through, but we do want to get it through.
My right hon. Friend the Minister referred to the Budget speech of 1951, and quoted the statement of the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell), who said:
… hon. Members who are feeling exhausted can relax and go to sleep for a bit."—[OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 852.]
He also quoted the remarks of the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) who, in his resignation speech, on 23rd April, 1951, said:
They did.
That is, went to sleep.
Whilst they were sleeping he stole £100 million a year from the National Insurance Fund."—[OFFICIAL REPORT, 23rd April, 1951; Vol. 487, c. 40.]
This argument about the amount of the contributions is, therefore, an old friend, probably just another disagreement between the Left-wing and the Right-wing on the benches opposite.

Mr. Houghton: Does the hon. Gentleman agree with my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) that my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) took £100 million out of the National Insurance Fund?

Mr. Browne: I am afraid that my arithmetic is not as strong as that of the right hon. Member for Ebbw Vale, but what I did agree with was that there was disagreement between the two right hon. Gentlemen. That was quite clear.
In this same famous Budget speech the former Chancellor of the Exchequer said:
It is really no more than a bookkeeping matter and makes no difference one way or the other to the gap which has to be covered by taxation." [OFFICIAL REPORT, 10th April, 1951; Vol. 486, c. 853.]


The hon. Member for Sowerby will correct me if I am wrong, but surely it could have affected the contributions.

Mr. Houghton: It could have affected the contributions. If my right hon. Friend had thought it desirable, in the economic conditions of 1951, to reduce contributions, it would have been possible to do so.

Mr. Browne: Therefore, it was rather a smooth dodge because none of us realised at the time that it could have affected contributions. Still, I am glad to read the headline in the "Daily Herald" today:
Pension dodge exposed.
Well, it is better late than never, is it not?
On the question of this extra 1s., there are two points of view. We are told that the proposal represents a smaller proportion than in 1946. If that is so, that is a good argument. But there is the other argument. There are the Harris tweed weavers who will now have to pay 8s. 6d. They are self-employed, get no holidays with pay, and have to pay whether they are employed or not. There are people, such as the Harris tweed weavers, to whom the 1s. is a matter of very great importance.
This is a vitally important matter for extreme cases, but I cannot work myself into a fury, with the quinquennial review debate coming on later, about the effect on the great mass of the workers. As the hon. Member for Sowerby said, it seems more of an academic exercise as to which pocket one puts it in and which pocket it comes from. In the end, the nation has got to keep its old folk, and, as the Phillips Report says, it depends on the cake and it depends on the slice of the cake.
I think that paragraph 298 of the Report contains the greatest wisdom. It says:
The fund on which the National Insurance Scheme must rely is that of the real capital assets of the community, including its human assets.
That, of course, is the truth. The present system is not based on an insurance principle. It is a contributory system, which is State-aided. The insurance principle was never started at all. It was an idea, but it was never started. What 'we have is a State-aided contributory system, and

on a basis which changes from year to year—not even from decade to decade. The State aid goes on and on—1980, 1990 and 2000; still the State aid goes on and on.
Although I may be alone in this view, I think it is an academic exercise to forecast what is going to happen in 1980, when the rates of benefit have been changed three times in five years. I pity the Government Actuary, with his head in the Treasury clouds and his feet on the slippery slope of politics. He has not a chance.
I have long held the view that the contributory system is good for the short-term risk, but I should like to hear stronger arguments against the long-term obligations being a Budget matter. They are now, they always will be, and the contributory old-age pension has not taken the old-age pension out of politics. I have a very open mind on what ultimately we shall do, whatever we say now, and even if we look forward to the next quinquennial review.
It is the duty of the whole House, in the forthcoming debate, to see that structural changes are made. There are some points which I am sure it is proper to raise in this two days' debate, because they will have to be considered later. First, there is the contribution to the National Health Service. The deductions from the employer and the employee are very similar to the Exchequer supplement to the Scheme.
It seems to me that it is possible to hold the view that it is unrealistic, that it gives a false impression to the contributor, to mix up the National Health Service with the Scheme at all. Perhaps if the National Health Service could be taken out of the Scheme altogether, it would clear up one point of confusion. People feel that they have paid for the stamp, and that, therefore, they are entitled to National Health benefits, whereas the stamp represents only one-tenth, or even less.
Then there is the question of increments. Paragraph 82 of the quinquennial review says quite clearly that the increment does not prove to be an incentive, and not even the 1951 increase has proved an incentive. Paragraph 202 of the Phillips Committee Report recommends no increase, but I still feel that


justice has to be done. If we could increase the increment from 3s. to 4s., this would give a single man, retiring at 70 after a life's work, £3 a week, and, if my arithmetic is correct, a man and wife £5 a week. After five years' work, the State could then say, "We have taken you out of National Assistance altogether." Surely that is a very desirable objective.
Another point which has not been raised today concerns tobacco coupons. I should like to read a paragraph from "The Old Age Pensioner" of December, 1952, which is written by one of the officials of the National Federation of Old Age Pension Associations, and which comments on an article in the "News Chronicle." This is what is says:
What does the editor mean when he says, 'In some ways old age pensioners have advantages over other people'? Is he referring to the tobacco tokens and the cinema proprietors' matinee concession to pensioners? If so, let me remind him at once that pensioners will be pleased to give these up if they could get the pension they claim. Pensioners do not wish to have advantages over other people, but they do claim entitlement to a pension which will enable them to live with a modicum of comfort which is not quite so near starvation level.
I do not know what view the House would take towards taking away the coupons from those who are at present drawing them, even if the pension rates were raised. But is it worth considering whether future pensioners with incomes less than the National Federation level of 50s. could claim their tobacco coupons from the National Assistance Board, and that we should discontinue the as-of-right entitlement to tobacco coupons which has been going on for some years, in relation to those pensioners who were over a certain income level. I have given the House the views of the National Federation spokesman, and I make no comment on whether I am for or against those views.
I have only two further points to make, briefly. One is about the earnings rule. I disagree with the Phillips Committee's comments in paragraph 389 about retaining the figure of 40s. I believe there is an open-and-shut case for the figure to be increased at least to meet the purchasing power difference between 1951 and today. There is no argument whatever against it, and I feel that it should be done.
Lastly, there is the widow with a 10s. pension. I know all the arguments that if the lady had been widowed at the present time and at the same age as when, in fact, she was widowed in the past, she would get nothing. That is the argument, but there is a feeling of injustice which is very widespread, and I wish, as my peroration, to read a letter which I have received dated 4th December—from one of my constituents:
What change has been made in my circumstances as a 10s. widow? I think it is cruel that no increase in this pension has been made—and this is the second increase to the others. It is cruel that I have to retire at 60 before I receive the big pension. How am I to manage, and many more I know, paying the big stamp, as a dinner attendant in Moss Park School. I work with widows with 32s. 6d. pension who are only paying 3d., who are over 60 and have not had to retire at all and who have grown up families helping to maintain the home. I live alone. This is my first and only house and I have a great struggle to keep going. Please make it your business whenever you can to voice your opinion.
I have made it my business, and I urge the Minister to consider it.

8.22 p.m.

Mr. Harold Finch: When listening to the Minister introducing the Bill this afternoon, I was reminded of some lines by Shakespeare in "Measure for Measure":
O, what may man within him hide,
Though angel on the outward side.
The Minister has given us Christmas promises which he intends to keep in the spring, although thousands of our old people will be unable to brave the winter and will not therefore be able to benefit from the increases. What does this angelic Bill of his hide? Shakespeare gives us "Measure for Measure," but when we look closely at the Bill we find that the Minister has given us triple-measure contributions for half-measure benefits. An angel he may be, but fallen badly from grace.
I am convinced that had it not been for the debates which have been taking place in the House for the last 12 to 18 months, we should not have had the increases in pensions stipulated in the Bill. I believe that these are largely due to the persistent efforts of the Opposition, of the old-age pensioners' organisations in the country and of the representations which have been made from time to time by the


trade unions. I say that because the question of pensions has been raised month after month—in May, in July and later, and, indeed, in the previous year; and it is only at the end of this year that the Government, in a hurried way, have brought forward the Bill.
Although I do not altogether object to some of the increases, I regard the Bill in many respects as inadequate, and I must protest against a Measure which, apart from these increases, lays down contributions which will last for the next five years. It lays down a structure which will call for contributions—State contributions, too—which will not be altered for the next five years.
Hon. Members opposite have repeatedly referred to some interim report and to some debate which is to take place in the next month or so or early in the next year. Reference has been made to the Phillips Committee's Report coming before the House. But unless I have misunderstood the Government, that will in no way alter the basis which is now being laid down in the Bill. I want the House fully to appreciate that, once we have passed the Bill, the financial arrangements and the structure contained in it will last for five years. Do not let there be any misunderstanding about that. If I am exaggerating the position, I hope the Minister will clarify it in his reply.
What is the financial structure contained in the Bill? First of all, it is stipulated that there shall be a £65 million payment from the Exchequer, making £325 million in five years. Already, as hon. Members will see, we are beginning to look at the five-year structure. Again, it is said that there shall be a supplement of one-seventh from the Exchequer, and here again it is laid down that it shall last for a number of years. Thirdly, and this is what I am very much concerned about, contributors are to be asked to pay £60 million more than is actuarially necessary for the fund.
It will be said that this £60 million will be used for uncovered benefits. We contend that that is the responsibility of the Exchequer. We have had some experience of these funds, and although it may be said that they are run on a simpler basis and with a smaller number of men, because here we are dealing with the whole community, I want hon. Members to look for a moment at these schemes.
The mining industry has a scheme something on those lines. When they set about the task of working out the actuarial basis, they said that it would mean so much from the employer and so much from the worker; and this was based on a person entering the industry at the age of 16 or 18 and retiring at 65, or whatever the age might be. The problem then arose: what about all those men who are nearing 65? How are we to meet that obligation? How can we deal with men who cannot contribute fully to the fund? They may now be 40 or 45 years of age. How can we meet that obligation?
In these circumstances, the employer makes a block grant or supplemental grant to keep the Fund intact. That has taken place in the mining industry. If the National Coal Board had not been prepared to pay for the uncovered benefits, the miners of this country could not have borne the extra contribution which would have been levied upon them. In fact, the Coal Board said, "We will meet that obligation. It is for the workman to meet his obligation towards actuarial contribution." This is a contributory system whereby the workman pays a certain amount, the employer pays his amount and the State says that it will make up for the uncovered benefits, but in this Bill the uncovered benefits are to be provided for by the contributor. The young man entering industry today has not only to pay for his own pension but for that of his granddad as well.

Mr. J. N. Browne: Has that not always been the case since the 1946 Act?

Mr. Finch: No, here I am referring to the actuarial Report, upon which the Bill is based. It is quite clear:
The extra weekly contribution from insured persons and employers … will yield in the first full year and subsequently, an extra amount of about £60 million a year over and above the produce of the actuarial contributions.
This extra £60 million is to be paid by the contributors and is largely involved in the 1s. contribution we have been discussing.
The Government are making these increases in such a hurried way that we have not an opportunity of considering the quinquennial valuation. In the mining industry we have been looking forward to the quinquennial valuation.


We know of the anomalies in insurance and the Industrial Injuries Act. We have told constituents that five years after the operation of the 1946 Act—which in some respects began to operate from 1948—the House of Commons would consider the quinquennial valuation and the working of the Act. Parliament would have a great opportunity of reviewing that Measure and the financial structure.
This Bill, which affects practically the whole community, is being rushed through the House in five or six days. We are to have the Committee stage on Monday and Tuesday and, I understand, the Bill will go to the Lords the day after. The least I would have expected would be that the Government would bring about these increases as a temporary arrangement and find means through the Exchequer, or whatever is in the Fund, for bearing the costs for a few months and then give Parliament a full opportunity of going into the details of the quinquennial review.
The 1946 Act was something we had never had before. It was a great comprehensive scheme, a progressive Measure far in advance of what we had before. Now, having had five years' experience of its working, we realise its anomalies and injustices. Therefore, some of us wanted an opportunity to discuss the matter in detail. Some of us believe, rightly or wrongly, that the insurance principle has outgrown its usefulness, that it is too cumbersome and gives rise to a great deal of trouble. In answer to my hon. Friend the Member for Sowerby (Mr. Houghton), the Minister admitted that it is frightfully complex. However efficient an actuary may be there is so much conjecture, so much surmise and assumption to be made.
We had that difficulty with the 8½ per cent. unemployment, which was the figure used When the Act came into operation. That proved wrong and, under a Labour Government, we had only about 1½ per cent. unemployment. Now it is to be fixed at 1½ per cent. next year, 2 per cent. the year after and then is to go back to 4 per cent. How can that actuary forecast what unemployment there will be in the years to come?
It is the same with future increases. We may be faced next year with a further demand for increased pensions if there is

a high cost of living. How is that to be met—by increasing contributions? Is a further demand to be met by State funds? We have to bear these things in mind. Surely the House should have an opportunity of going into these matters to see whether the insurance principle is sound. Other hon. Members hold the view that the contributory scheme is good, but do not agree with the flat rate principle. They believe in the principle of "From each according to his ability, to each according to his needs," and that the higher-paid man should pay a higher contribution than the lower-paid man. There may be some truth in that, but Parliament will not have the opportunity to discuss all these great principles.
What we are doing now has to last for another five years, and the references to interim reports or discussions in the Phillips Committee will not affect the foundation and financial structure of the scheme. I venture to say that if the Government put through a Bill of this kind, based on this financial structure, in six months' time vast numbers of the population will look upon this Measure with severe misgiving.
There is the question of the anomalies that exist already under the Act. The question of widows who receive 10s. a week has already been referred to. I regret that the Minister seemed to be sheltering in these matters behind the Advisory Committee. We know that an Advisory Committee advises the Minister from time to time, but the 10s. a week widow's pension is nothing new. It has been in operation for years, and we debated it in 1952 when considering the increased rates of benefit. Why is the Advisory Committee only now discussing the 10s. widow's pension? The right hon. Gentleman seemed to say that all these anomalies could be discussed after the Advisory Committee had given its advice, but these are matters which should be contained in the Bill. Some of these anomalies should be removed.
That brings me to the part of the Bill which deals with industrial injuries. I agree with my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton). Why there is not to be the same proportionate increase in industrial injury benefit as is being given in National Insurance benefit, I do not understand. Why


should there be a difference in the proportion of increase?. It is true that the industrial injury benefit will go up to 67s. 6d., but if this benefit were given in the same proportion as in the case of National Insurance, the rate would be 69s.
It may be said that there is, in fact, an increase in injury benefit and in disablement benefit, but it does not meet the present position with the ever-rising cost of living. The cost of living index should be based on a different method for people in receipt of fixed incomes.
Only a comparatively small number of men will receive the full disablement benefit of 67s. 6d. The vast majority are on assessments of 10, 20 or 30 per cent., and it must be remembered that a 20 per cent. assessment, which under the new benefit rate will increase from about 11s. to 13s. 6d. a weak, will give only a half-a-crown a week increase to the average disablement pensioner.
The most serious feature in connection with industrial injuries benefit is the hardship allowance for the man who, following an accident, cannot return to his employment. If he has been a skilled engineer or collier or a railway driver, earning £12 or £15 a week, and has lost the sight of an eye or is otherwise seriously impaired, he will be unable to return to his occupation. He will be given his basic pension of 5s. 6d. or 11s. 6d. a week, as the case may be, but he has lost his earning of £12 or £15 a week.
A man in this category might be given a light job at a wage of £6 or £7 a week, but even so, he will have lost £7 a week. The most that a man in these circumstances can get by way of hardship allowance is £1 a week. It is proposed in the Bill to increase it to 27s. 6d. That is not adequate.
This is a grievous matter for skilled men. There are men who have given their lives to an industry, who were apprentices in it, who have worked up a knowledge of it and a skill in it, and who now have lost their employment through what may be regarded in some spheres of employment as a minor injury, but which, however, deprives them of their skill and their livelihood. They are now to be compensated by an extra 7s. 6d. I make a special plea to the Minister for these men. This hardship allowance is

utterly inadequate. This increase does not meet the position, and I hope that in Committee the right hon. Gentleman will give serious consideration to the problem of the hardship allowance.
Although my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) dealt with it, I cannot refrain from also discussing the question of the old compensation cases. There are about 50,000 men in the mining industry alone still under Workmen's Compensation. They have had no increase in their benefits since 1943. The maximum payment that can be made to a single man is £2. There is no provision in the Bill to increase it. We had hoped to have removed this anomaly.
A few weeks ago we were dealing with the old pneumoconiosis cases, and we were congratulating ourselves on having got rid of all the old anomalies between the two different classes of men, those under the old Workmen's Compensation Acts and those under the National Assistance (Industrial Injuries) Act. Yet here we are creating another class of men whose payment is to remain at £2 a week, while men under the National Assistance (Industrial Injuries) Act whose accidents occurred after 5th July, 1948, will get £3 7s. 6d. if they are single. The position of married men will be altered, admittedly, because of the increase in sickness and unemployment benefit, but even so there will be a grave disparity between married men under Workmen's Compensation and married men under the National Assistance (Industrial Injuries) Act.
These are very important problems which are of great concern to the Trades Union Congress, and to the National Union of Mineworkers in particular, and I hope that in Committee the Government will seriously consider these anomalies. If they are not considered, if some Amendment is not made to the Bill, let the Government make no mistake about it, there will be deep concern among the industrial workers and, grave dissatisfaction. They look upon accidents and industrial diseases as extremely important because they affect a man's ability to earn his living and often rob him of his earnings altogether. We shall have to turn our attention in Committee to some of these matters, and I hope that the right hon. Gentleman will bear them


in mind so that we may remedy some of the anomalies in the Bill.

8.43 p.m.

Mr. Julian Ridsdale: The hon. Member for Bedwellty (Mr. Finch) said at the beginning of his speech that it was because of the prodding of the Opposition that we have had this Bill. Nothing could be further from the truth. We have this Bill because the sound financial administration of this Government since 1951 has made it possible, and not because of any prodding from the Opposition. When hon. Members opposite were in power I was a candidate in an industrial constituency, and I used to visit the old people and saw their plight in those localities in 1951. Why did not the Labour Party exercise this emotion then? Why did hon. Members opposite not do something about the plight of the old people at that time?
The hon. Member for Sowerby (Mr. Houghton) asked a very searching question. He asked: from where is the progressive improvement of the lot of the old people to come? That arrests all our minds, because this is a problem which we shall have to face during the next 25 years. I take the view that the best help to the old people can come only from stability in the price level, and that can only come through good administration.
In the last 18 months of Socialism prices went up by 12 per cent. In the last 18 months of this Government prices have only gone up to 2·1 per cent. Help to the old people and, indeed, to the whole country can only come from an increase in production. We can make play with figures in this House as much as we like. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite have made great play with them this afternoon, but what matters to the old people is that their coal should be cheaper, their light should be cheaper—[HON. MEMBERS: "And their tea."]—their gas should be cheaper, and their food cheaper. Hon. Members opposite may chide us about the price of tea, but during the time you were in power I was growing soft fruit when you released the price controls.

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): I hope the hon. Gentleman will be good enough to remember that he is addressing his remarks to me.

Mr. Ridsdale: I was referring to the time when the Opposition withdrew the controlled prices for soft fruit. The prices almost doubled, but since then they have come down, and so will the price of tea.
But I am not pessimistic like some hon. Gentlemen opposite. Provided the present increase in productivity continues, I am not unduly alarmed by the fact that in the next 25 years the working population will stay at 23½ million to 24 million while the number of retirement pensioners will increase from 4⅓ million to 7½ million. The change in the age distribution may even act as an incentive to encourage us to move forward to the new industrial age before us. The only worry I have is a change of Government and having a restrictionist instead of an expansionist policy such as this Government are pursuing.
But the problem which has been exercising our minds this afternoon has been the issue of the distribution of the contributions. The existing pensions are financed from three sources, the employer's contribution of 41 per cent., the employee's contribution of 44 per cent. and the Exchequer supplement of 15 per cent. As things are before the proposed changes, the estimated deficit will come to £18 million in 1956–7, £51 million in 1957–58, £107 million in 1958–59 and £126 million in 1959–60. Under the Bill there is a Treasury liability of £275 million for the next five years, and this can only be met out of general taxation.
This is all going to mean increased taxation, and although no one likes to make the employer or the employee pay more, if we agree that taxation is inflationary then we should make this scheme as self-financing as possible. Otherwise, we shall get a rise in the general price level and we shall not help the old-age pensioners, because we shall find ourselves getting into the inflation spiral which we had when the Socialists were in power.
The hon. Member for Sowerby said that the Bill does not take a single person off National Assistance. I particularly noticed that point because I have been alarmed by the number of people in my constituency who do not want to take National Assistance because they have not contributed towards the scheme. They are the ones among the old-age pensioners who have suffered most, and I


welcome the Bill because that class of person will probably be helped more than any other.

Mr. Tudor Watkins: Mr. Tudor Watkins (Brecon and Radnor) rose—

Mr. Ridsdale: I cannot give way because the time is short and there are other points that I want to make.
I hope the increase in the earning rate in respect of old-age pensioners will be raised, and that the treatment of capital for National Assistance purposes will be brought more into line with the present value of money. I would also join in the plea which has been made on behalf of the 10s. a week widow.
We are making a sincere effort to bring pensions up to the present price level, and I welcome the Bill on that account, but in order to help pensioners we must ensure that increasing taxation does not raise the price level still further, for we shall otherwise find ourselves where we were. Consequently, I hope that we shall have in power in the future a Government which will maintain stability in the value of money, because that is what matters more than anything else to the old people. If we had the inflationary policy advocated by the Labour Party in "Challenge to Britain" I should fear very much for the old people.

8.53 p.m.

Mr. Bernard Taylor: I am sorry that the Minister is not at the moment in his place—I am sure no discourtesy is intended by him—because I want to make one or two references to the speech he made this afternoon when moving the Second Reading. I wondered whether he was making a speech in the House of Commons or playing cricket at Headingley.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Ernest Marples): At all events my right hon. Friend is not playing cricket in Australia.

Mr. Taylor: Judging by the last two or three speeches which the Minister has made, it seems to me—I agree entirely with my hon. Friend the Member for Sowerby (Mr. Houghton)—that he appears to be going from bad to worse. In our last debate about old-age pensioners he described the campaign of the old-age pensioners' organisation as a scurrilous

one. Requests were made by the Opposition that he should withdraw the adjective, but he refused and persisted in describing the campaign as scurrilous. I would remind him that desperate people are very often angry people, and it is because of the delay that there has been that the old-age pensioners have conducted an intensive campaign during the past few months with the object of getting their standard of life improved.

Mr. C. J. M. Alport: My recollection is that my right hon. Friend referred to a certain leaflet as scurrilous and not the campaign by the old-age pensioners.

Mr. B. Taylor: We can look up the records and see whether the interpretation I have put upon the Minister's remarks in the last debate is correct.
The right hon. Gentleman this afternoon said that by some individuals, and by sections of the Press, he had been called "Mr. Facing-Two-Ways" for doing something too soon and doing it too late. He is guilty of both. He is guilty of being too late in coming to help the old-age pensioners before oncoming winter, and he is too soon after the publication of the two Reports in bringing a Measure of this kind before the House. As my hon. Friend the Member for Sowerby said, the Bill must have been prepared before the Phillips Committee's Report was published.
The Minister referred to the cost-of-living index. I do not want to make a pronouncement on that, but it is very important not to judge the standards of National Insurance beneficiaries from the angle of the general cost of living. We believe that there should be a special index for that purpose.
I join with my hon. Friend the Member for Sowerby in deploring the criticisms and complaints that the Minister made this afternoon and on previous occasions about the Exchequer supplement being reduced in 1951 from one-fifth to one-seventh. If there were any validity in his criticism, then instead of continuing the reduction he would have seized the opportunity in 1952—and he has the opportunity on this occasion—of restoring the pre-1951 position.
The Minister was not clear today in his handling of the finances of the scheme. [HON. MEMBERS: "Where is the


Minister?"] Insured contributors to the National Insurance Scheme, as laid down in the National Insurance Act of 1946, have since 1951 paid a contribution of 2d. to meet the emerging costs of retirement pensions.

Mr. Finch: On a point of order. We are dealing with a very important matter and I should have thought that the right hon. Gentleman would be here.

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): That is nothing to do with me.

Mr. Taylor: The Minister endeavoured to create a wrong impression by a lack of clarity about the finances of the National Insurance Scheme. The 2d. of the insured contributors towards meeting the emerging costs of retirement pensions has been in existence since 1951. The Minister proposes in the Bill to raise that 2d. to 8d. We say that is wrong.
He was very loud in his criticism of the 1951 Act, but this afternoon it has been revealed on his own admission that he did not disagree with what was done, but disagreed merely with the method. I suggest that, in view of his criticisms and in view of his admission this afternoon, it would be better for him to drop those complaints and criticisms. I thought that he was very unfair to the Trades Union Congress, and when he reads, in the OFFICIAL REPORT, the words that he uttered in this respect, I hope that he will regret them.
I now turn to the question of the attitude of the Trades Union Congress to this matter. I was very pleased to read in the Press on Saturday morning that the proposals contained in the Bill were unacceptable to it. I should like to read what was reported in the "Manchester Guardian" on Saturday last, which was as follows:
The proposed increase of a shilling in workers' (and also employers') weekly contributions appears to the T.U.C. to be designed not only to pay for the increased pensions announced, but also to contribute towards the extra cost of higher benefit for those already over the initial age for receiving pensions. 'In these two respects the Government proposals are contrary to the submissions previously made by the General Council and are therefore not acceptable,' the T.U.C. says.

Sir William Darling: Is that a quotation from a resolution, or the opinion of the "Manchester Guardian"?

Mr. Taylor: This is a report by the "Manchester Guardian" of a statement made on behalf of the Trades Union Congress last Friday.
I take this opportunity of congratulating my hon. Friend the Member for Sowerby on a well-informed, factual, and passionate speech. I was especially glad to hear his reference to the question of increased productivity and what its relation should be to the benefits for the old, the sick, the injured and the unemployed.
The hon. Member for Lewisham, North (Sir A. Hudson) referred to the National Assistance Board exercising itself and providing facilities for the old folk. I should like to reiterate what I said earlier in an interruption, namely, and this was provided for in the National Assistance Act, 1948, and is carried out by the welfare committees of local authorities. The hon. Member for Barry (Mr. Gower) made the rather astonishing statement—at any rate, it astonished me—that the Bill had been warmly received. There is much in this Bill that I and many of my hon. Friends in no way welcome.
This has been a very interesting debate—as was expected, because there has been for many months, both inside and outside the House, increasing anxiety over the plight of all National Insurance beneficiaries, and especially those in receipt of retirement pensions. We have already had three debates this year, and during the past few months many questions have been put to the Minister of Pensions and National Insurance drawing his attention especially to the plight of the old folk, and asking him if something could be done before the winter set in.
My right hon. Friend the Member for Battersea, North (Mr. Jay), during a speech which he made on 8th April last, expressed this matter much better than I could when he said that there was the expectation of an announcement by the Chancellor in his Budget statement that something would be done, if only by way of an interim payment, pending full discussion of a Bill that would deal with the fundamental questions and the anomalies which have revealed themselves in the National Insurance Scheme during the past six years.
Here I should like to say that I noticed in the Press last night that the Chancellor of the Exchequer has domestic difficulties, and that we can understand his absence. All of us, on both sides of the House, sympathise with him in the circumstances through which he is passing.
What did we get in the Budget statement? The Chancellor merely made a sympathetic reference to the old people. He enunciated a policy of wait and see. This is a summary of what he said: there could be no advance in social reform until we had the growth of our existing commitments well in hand. The Chancellor's references to the question of the old people can be found in c. 210 and 211 of the OFFICIAL REPORT of 8th April.
He went on to say that the Minister of Pensions and National Insurance had the problems of the old people very much in his mind, but that it would be useful, before coming to any decisions on these questions, to have before him two Reports—that of the Government Actuary on the quinquennial review and the Report of the Phillips Committee, which was set up in the summer of 1953. The Government have too long delayed action in this field of providing before the oncoming winter additional benefits for the old people, and the pleas that have been made in this House in three debates, and the many Questions put to the Minister, have not received the attention which they deserve.
All that we have had over the past few months has been what I would describe as an alibi—"We must have these two Reports to see what can be clone and where we are going." What is the result? It will be April and May, 1955, before the old people get an increase in benefit.
My deduction from all this is that this Bill now before us is a hurried one. It denotes a change of mind. The reason the Government are now in such a hurry is that they have been moving only at the pace of a tortoise for the last few months and now desire the speed of a greyhound. The reason this change has been made is anybody's guess. It may be electoral, or the result of pressure in this House and outside, or it may be a combination of both.
Quite recently, I had sent to me a provincial newspaper, the "Louth Standard"

of 20th November last, containing a report of an old-age pensioners' meeting. The hon. Member for Louth (Mr. Osborne) is not in his place, but this, at any rate, does not affect him as much as it affects the Government. The chairman of the area council said at that meeting that he could not help feeling that although the announcement of the pensions increase had been promised before Christmas by the Minister of Pensions and National Insurance, the actual making of the increase would no doubt be linked with the date of the next General Election.
I will tell the Minister what steps he should have taken not later than April of this year. In my view, the right hon. Gentleman should have introduced a short Bill seeking Parliament's approval for an interim increase in benefits pending the future of National Insurance being decided upon as a result of the two Reports. Had that been done, the right hon. Gentleman would have had our wholehearted support.
I further suggest that the increased benefits could have been given without increasing contributions. The cost of the interim payments could have been met from the Exchequer, or from the surplus, not in the National Insurance Reserve Fund, but in the National Insurance Fund, which is quite distinct from the Reserve Fund, or from a combination of both. Had that been done in April this year, the administrative job to which my hon. Friend the Member for Sowerby drew attention would now have been completed, and payment of the increased benefits to old-age pensioners and to other National Insurance beneficiaries could have been made in September or not later than October of this year.
For a long time I had hoped and believed that the two Reports to which reference has been made in this debate would provide the opportunity to discuss, firstly, the structure of the existing Scheme, and, second, the anomalies which have revealed themselves during the six years' working of the National Insurance Scheme.
I have only the following comment to make on the question of the structure. Many opinions have been expressed for a long time now by interested organisations. The Minister reminded us this afternoon that even the T.U.C. had come


down on a certain side as far as the structure was concerned. These organisations, economists, bankers, and a lot of other people have expressed their views and opinions on the matter, and it was suggested from the benches opposite today that we on this side of the House might not be united regarding what the future structure of National Insurance should be.
Two weeks ago, the hon. Member for Wolverhampton, South-West (Mr. Powell) made a very powerful and very thought-provoking speech on the subject. I am sure I should not be misrepresenting him if I said that from his remarks I thought that he had arrived at the conclusion that the time had come when we should look at the existing structure of the Scheme. I cannot differ from him.
As what he said was important, I shall quote from it. He gave a lot of factual material, and continued:
In these circumstances, I believe that the House, united as it is in determination to provide a means-test-free subsistence retirement pension, has very seriously to face this question, whether it is worth while trying to continue to treat this clement in our social security system as an insurance element at all; whether there are real sound arguments for maintaining the whole as an insurance scheme, or rather taking as insurance all the other benefits and meeting them genuinely year by year on an actuarial, self-respecting basis"—
Then comes the operative part—
but putting the new retirement pensions on a similar basis to that which we have already in family allowances—a payment which is made without the forms of insurance, which is means-tested through taxation but not means-tested, as it were, at the source, and which is met as a charge upon the general revenue."—[OFFICIAL REPORT, 16th November, 1954; Vol. 533, c. 268–9.]
I compliment the hon. Member on that very courageous statement. It indicates that, with regard to the existing structure of the Scheme, there is not complete unanimity on the benches opposite. I interpret that—and if my interpretation is not correct the Minister will correct me—it is the opinion of the Government that the existing structure should continue for a further period of five years at least.
I am not discussing tonight either the merits or the demerits of the existing structure, but I do say that that applies not only to the proposals in the Bill,

but also to the anomalies. We have no opportunity at all to discuss the anomalies, many of which have been mentioned today, and about which I shall have a word or two to say.
I should like to draw attention to three anomalies only. Under the existing Scheme widows are placed in three categories. There are the post-1948 widows, those under 50, who can get the pension. There are those under 50 who, after the first 13 weeks, get no pension at all. I know it is a question of what our social policy should be, but that I do not propose to discuss. I would only venture to express the personal opinion that the age of 50 is too high.
There is also the pre-1948 widow on 10s. a week. After five years' working of the Scheme, that is an anomaly which we should seriously consider removing. Then there is their earnings rule. There is not complete satisfaction about that.
I was very pleased to hear the Minister say, and I expect he was speaking for the Government, that it is not proposed to implement the recommendation of the Phillips Committee with regard to raising the retirement age. That poses another question. Shall we provide the incentives for postponement of retirement? It is impossible to discuss those matters on this Bill in the limited time available. This Bill provides no opportunity at all for discussing these matters of importance.
No one wants to delay the passing into law of those parts of the Bill which—only in six months' time unfortunately—will give some relief to the aged, the sick, the injured and the unemployed. The proposals about benefits are much too late to become effective this winter. That is the responsibility of the Government. On this question the Government are guilty of delay. They should, and could, have done something much earlier.
I now turn to the question of contributions. The lower-paid worker in class 1 will feel the draught under these proposals. His contribution is to be 6s. 4d. plus 5d. for industrial injuries, making 6s. 9d. in all. There are many lower-paid workers in this country earning not much more than £6.

Mr. Thomas Fraser: Some are not getting as much as that.

Mr. Taylor: I accept that. When they have paid their contributions, and all the other incidental contributions, it makes a big hole in their wage packets on Friday night.
Then there are those in class 2 who will be faced with a contribution of 8s, 5d. a week. I assert that although numerically they constitute about only one-sixth of the total insured population, to some of these people in class 2 this contribution of 8s. 5d. will indeed be a crushing burden. The type of person in this class who conies most readily to mind is the small shopkeeper with a small turnover and small profits. In fact, his income is not very much outside the optional limit of £104 a year. That is another anomaly that we ought to consider, because if £104 was correct as the optional limit in 1948, it certainly is not correct in 1954.
My right hon. Friend the Member for Battersea, North will deal tomorrow with the financial aspects of the Insurance Scheme in a much better and clearer way than I can. But let me put this to the Minister very seriously. If the Exchequer supplements had been restored to one-fifth, and only the actuarial contribution levied, the two amounts together, translated into weekly terms of the insured person's contribution, would be within 1½d. of meeting the sum of £112 million which these increased benefits will cost in a year.
I wish to say a word about National Insurance. I do not wish to speak much longer, because I have arranged to resume my seat very shortly, although I must confess that I have a lot more to say. Let it not be assumed that the single person receiving a supplementary pension will get a 7s. 6d. increase. He will not. He will get only 2s. 6d. The married man will not get I 1s. a week increase. He will get only 4s. Under the Bill, the poorest sections of the community will benefit the least.
I want to raise with the Minister the question of disregards. I do not know whether he has given any thought to this important matter, but the question of the disregards under the National Assistance Act, 1948, is very important in 1954 because of the change in money values. To take one item only, of a person's superannuation payment the first 10s. 6d. only is disregarded, and as I work it out

—I am open to correction—the equivalent figure today is 14s. My union, and the colliers whom I represent in Nottinghamshire, decided that, because of the plight of the old colliers in that area, they should, from their own funds, give them an increase of 5s. a week in the miner's pension, bringing the figure to 15s. Those Nottinghamshire miners who are in receipt of supplementation will not benefit to the extent of 5s. under the Bill, but only to the extent of 6d., and the ratio of the people in receipt of supplementation is not 25 per cent.; in our coalfields in Nottinghamshire it is at least 50 per cent. and possibly 60 per cent.
Those who come from the mining areas feel very strongly about the question of industrial injury. I disagree with my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) on only one point which he made. He said that the number of accidents happening in mines was 40 per cent. of the total. If he looks a little more closely into the matter he will see that it is 66 per cent. As a consequence, we feel this position very much indeed.
Unless the Minister agrees that these proposals for industrial injury benefits are emergency and temporary proposals only, we take very strong exception to them. Why has he taken this action without receiving the Actuary's review of the Industrial Injuries Act? Why has he not increased the benefits in the same proportion as that in which he has increased the basic National Insurance benefits?
My hon. Friend the Member for Bedwellty (Mr. Finch) drew attention to the special hardship allowance. This is the first time that this benefit has been increased since 1948. The Government did not increase it in 1952, although I remember that in the Committee upstairs we implored the Minister to pay greater attention to the special hardship allowance. It is an important benefit because it helps to bridge the gap between pre-accident earnings and the position after the assessment has been made and the man is unable to return to his pre-accident work or work of equivalent standard.
I reinforce the remarks of my hon. Friend the Member for Bedwellty about what, in the mining areas, we call the old "compo" cases. Are they to be


forgotten for all time? I know that this is a difficult question and that we have been wrestling with it for six years, but will the Minister tell us that he will have another look at it and will do all he can to see that these people receive just consideration of their claims? There are many pneumoconiotics, and partially and totally-disabled people who, under the old Workmen's Compensation Act, have suffered for years, and who will continue to suffer until some action is taken.
To summarise, this Bill does not tackle the anomalies which have been referred to in the debate. It fails to restore the 1946 position in respect of the Exchequer supplement, and we are disappointed about that. It presupposes a continuance of the existing structure for five years, and we do not accept that. The proposed benefits, as pointed out by my hon. Friend the Member for Sowerby, have no regard to the increased productivity which has taken place since 1946.
Subsistence should only be a floor, not a ceiling. In view of the increased production which has taken place since 1946 these rates are very little more than the rates of that year. The old have helped to make increased productivity possible. They ought to have a share in it by an improvement in their standard of living. I hope that the Minister will think again between now and Committee stage, and give to the old people their right and proper share in the nation's increased productivity.

9.31 p.m.

The Financial Secretary to the Treasury (Mr. Henry Brooke): I greatly appreciate what the hon. Member for Mansfield (Mr. B. Taylor) said about my right hon. Friend the Chancellor of the Exchequer and the reasons for his absence. I know that the sympathy of the whole House is with my right hon. Friend. Those who have been acquainted with him, not only as Chancellor of the Exchequer, but in close connection with another great service—as Minister of Education—will understand how sorry he is that he cannot be present in the House tonight.
My principal part tonight should be to get on the record as clearly as possible the main financial figures which must form the background to this Bill. My hon. Friend the Joint Parliamentary

Secretary to the Ministry of Pensions and National Insurance is to speak tomorrow. With permission, I will leave to him detailed matters about the rates of benefit which the hon. Member for Sowerby (Mr. Houghton) and others have raised, and about National Assistance and its linking with the proposals of this Bill, and so forth.
I approach the Bill as a great and understanding contribution to human happiness and to the happiness of those who have the least power by their own efforts to alter for the better their own way of living. I am glad that the debate today has taken place in no bitter atmosphere. There have been criticisms, there have been questions, but I trust that when this Bill goes from us to another place, as it will, we shall all have joined in trying to ensure that when it gets on the Statute Book it is as favourable to the older men and women of this country as the national position and the national prospects make possible.
The hon. Member for Rhondda, West (Mr. Iorwerth Thomas) said that this was a need requiring satisfaction. That is why the Government have brought the Bill forward. They have brought it forward within three years, not five. The hon. Member—rather inconsistently, I thought—called upon us to withdraw the Bill. Of one thing I am certain. It is that millions of older men and women at this moment are profoundly thankful that within, not six months as the hon. Member for Mansfield said but 4½ months, they have the prospect of receiving more money. [An HON. MEMBER: "Too many too late."]
To withdraw the Bill, to seek now to alter its fundamental basis, would have one result, and one result only. It would postpone the time when these benefits could become payable and would snatch enjoyment from the people whom the Bill is designed to benefit. For that reason, what we have to do is, not to speak in terms of scrapping the Bill, but to examine whether this is the best Bill which can be brought forward, as I, speaking as a Treasury Minister, intend to show that it is. [An HON. MEMBER: "But you are from the Treasury."] Yes, and I speak as one who, when he entered political life, was determined among other things to play his part in helping the older people.
If we are to mould the Bill aright, it is essential that we should be certain of our facts. The right hon. Lady the Member for Fulham, West (Dr. Summerskill) stated in her speech that if the trade union recommendation were accepted and if the Exchequer supplement were raised from one-seventh to one-fifth, it would be possible to reduce the extra contribution from 1s. to 1d. or 1½d.
I have examined that suggestion with the greatest possible care and have taken advice upon it. My understanding is that if the Exchequer supplement were so increased, it would be possible to reduce the additional contribution, not by 11d., but by 4d. instead of being 1s., the additional contribution would be, not 1d., but 8d. The cost which would thus be incurred would be an additional cost to the Exchequer of £32 million a year. I put that on record as the first correction which I wish to make.

Mr. Jay: To avoid misunderstanding, does the Financial Secretary represent that 4d. as being what the Exchequer would have to pay additionally if the proportion of the one-seventh were altered to one-fifth? When speaking of the 1½d., my right hon. Friend was thinking in addition of the excess over the actuarial contribution.

Mr. Brooke: What I understood the right hon. Lady to say was that the alteration from one-seventh to one-fifth would make it possible to reduce the contribution to 1d. [HON. MEMBERS: "No."] What I am now making clear is that that alteration in the proportion of the Exchequer supplement would render possible a diminution of 4d. from the insured person and 4d. from the employer.
I should like, secondly, to refer to figures given by the hon. Member for Ince (Mr. T. Browne), who said, I think, that in the Bill he espied the seeds of industrial discontent. He called attention, quite rightly, to the fact that in the financial year 1950–51 the Exchequer contributed £144 million to the Fund, and he pointed the contrast between that and the figure of £91 million which, under the Bill, the Exchequer will provide next year. What the hon. Member for Ince did not point out was that the decrease from £144 million in 1950–51

to £70 million in the current year is entirely due to the 1951 Act, passed by the Government which he supported. This Bill, far from diminishing the cost which falls upon the Exchequer, will substantially increase it.
The last thing I want to do is to appear to give the House an arithmetic lesson, but I believe that I can possibly best serve the interests of hon. Members on both sides if I enumerate some figures, bearing in mind that this is the end of the first day of the debate and that my words will be on record in HANSARD ready for the continuation of this debate tomorrow and for the subsequent Committee stage. For that reason, I make no apology for going through certain figures which should be on the record.
If hon. Members will look at the Report from the Government Actuary on the First Quinquennial Review, the Blue Book, they will find certain figures on page 23, and they will see that, under the existing law, expenditure from the National Insurance Fund in 1955 to 1956 is estimated to be £550 million, rising in 1959 to 1960 to £667 million and in 1979 to 1980, 25 years' hence, to no less than £917 million. That is under the existing law.
Now let us see the effect of the Bill. If the Bill goes through, the expenditure from the Fund will rise next year from £550 million to £652 million, an increase of £102 million. By 1959 to 1960 the figure will not be £667 million but £800 million. By 1979 to 1980 it will be not £917 million but £1,093 million.
Now let us see what the cost to the Exchequer will be. Under existing legislation the cost to the Exchequer next year will be £70 million. If this Bill goes through it will rise to £91 million, an increase of £21 million. In 1959 to 1960, five years' hence, the cost to the Exchequer under existing legislation will be £194 million. Under this Bill it will rise to £236 million, an increase of £42 million. By the end of the period which we have under review, by the year 1979 to 1980, under existing legislation it will be £434 million, and under the Bill it will be £517 million, an increase of no less than £83 million.
When hon. Members in all parts of the House suggest, as they were suggesting at Question time recently, reductions in this tax or that, I would remind them that


under this legislation the burden which is now £70 million on the Exchequer is going to rise to over £500 million. We have, therefore, to look carefully how the additional cost of benefits is to be met. It is to be met in this way.
In the next financial year, 1955 to 1956, the increase is to be met as to £78 million from contributions from the insured persons and the employers, and as to £21 million from the Exchequer. That is to say, the Exchequer will be carrying 21 per cent. of the increase. Five years' hence, in 1959 to 1960, the excess for which the Bill is responsible will fall as to £91 million on the contributors and as to £42 million on the Exchequer. By that time the Exchequer will be carrying 31 per cent. of the additional cost. In 1979 to 1980 the additional cost will fall as to £93 million on the contributors and as to £83 million on the Exchequer. At that time the Exchequer will be carrying 47 per cent. of the additional cost due to the Bill, as my hon. Friend the Member for Aylesbury (Mr. Summers) rightly pointed out in his admirable speech.

Mr. J. Griffiths: We are seeking to follow the hon. Gentleman's figures, and we shall read them with interest tomorrow, but may I ask him whether in his calculations he is taking into account savings to the Treasury from National Assistance?

Mr. Brooke: I am speaking entirely of the National Insurance Fund. The right hon. Gentleman will realise that it is quite impossible to forecast many years ahead what the cost of National Assistance will be.

Mr. Griffiths: I can quite see that, but already it has been said from the other side of the House that there has been an estimate of saving next year from National Assistance?

Mr. Brooke: Then one has to take into account the extra cost of war pensions, too. Those are matters with which I should not complicate these figures which relate solely to the National Insurance Fund.
I must tell the House—and these are the last detailed figures—the way in which the total cost on the National Insurance Fund will be met. The total expenditure from the National Insurance

Fund will be met in this way. After deducting £45 million a year which is available from interest on the existing Fund: next year, 1955–56, as to £516 million from contributions, as to £91 million from the Exchequer; five years hence as to £519 million from contributions, as to £236 million from the Exchequer; in 1979–80 as to £531 million from countributions, and as to £517 million from the Exchequer. At that time the Exchequer will be carrying 49 per cent. of the cost and the proportion will later rise to over 50 per cent.
I read this in the "Daily Herald" this morning. [HON. MEMBERS: "Hear, hear."] I am glad that hon. Members opposite cheer, because it is a shockingly false statement. This is what it says:
That extra 1s. on the National Insurance contributions is being imposed to make the workers and the employers pay nearly 90 per cent. of the cost of raising the benefits of old-age pensions.
In fact, they are not going to pay more than 79 per cent. and the amount which they pay is going to fall to 50 per cent. That is the answer to the allegations that have been made that the workers are being required to carry the weight which ought to be carried by the Treasury.
I have one more argument, and then I will pass from this part of my speech. The right hon. Lady and hon. Members opposite criticised the Bill on the ground that it contains a great shift of the burden from the Treasury to the contributors. The truth is, as an analysis of the figures will show, that the broad division of the whole cost of future pensions and benefits is unchanged by the Bill. Under the Bill it will be just about the same as was planned under the 1946 Act passed by the Labour Government.
The case of the Opposition is that the increase in the Exchequer payments from £70 million in this year to £236 million five years hence is not enough. That is what we have heard throughout the debate. It is said that more ought to be cast upon the Exchequer in order that the contributions of workers and employers should be lightened. In five or six years time the contributors will be bearing only two-thirds of the cost of National Insurance and the taxpayer one-third. I have heard hon. and right hon. Gentlemen urging that the Exchequer


should pay one-fifth. What I am pointing out is that in five years' time it will be paying one-third.
In the absence of the Chancellor of the Exchequer, I should like to express thanks—I hope it is the thanks of the whole House—to the members of the Phillips Committee for the extremely valuable work that has been done. Hon. and right hon. Gentlemen on both sides of the House have expressed appreciation of the important social contribution made by the Report. The Committee examined the question whether the Insurance Scheme should be contributory or non-contributory, and it formed the view, which has been held by all hon. Members on this side of the House and by some—I dare not say most—hon. Members opposite that it should be contributory. As the Minister pointed out, every witness before the Committee came out in favour of a contributory scheme.

Mr. B. Taylor: Mr. B. Taylor rose—

Mr. Brooke: Let me say in passing that, if we were to go over to a noncontributory system, it would cause the burden on the Exchequer to rise from £70 million now to £755 million in five years' time. The hon. Member for Sowerby said, "All you will argue about is who is going to pay what." If £755 million goes on to the Budget, it will be some argument.
Granted that it is to be a contributory scheme, we must also take it for granted surely that increased benefits should be accompanied by increased contributions. Under the Bill an increase of £2 12s. a year in a man's contribution earns him an increase of £19 10s. a year in pension and various other extra rights. Where could one find a better investment than that? [HON. MEMBERS: "In tea."] The next question is whether the amount of the contribution is reasonable. In respect of all those at present drawing pensions, the Exchequer is now paying over 95 per cent. on average. There is not a single person drawing a retirement pension now towards whose pension the Exchequer is not paying at least 85 per cent. A married man, now working, born in 1910, with a wife born in 1915, will, when he retires have two-thirds of his pension paid for by the Exchequer.
The contributions that boys now entering insurance under the new scheme and their employers make will not meet the full cost of their pensions. An Exchequer payment will be needed as a contribution towards every pension.
The Phillips Committee recommended that the triple contribution should exceed the actuarial contribution based on age 16 and should contain something towards the additional cost of raising pensions for existing contributors. The Committee made a recommendation bearing out the provision that existed in the 1946 Act for that very purpose.

Mr. B. Taylor: It was not a unanimous Report.

Mr. Brooke: The majority recommended a particular formula for this which would call for a figure of contribution from the insured man distinctly higher than 6s. 9d. The Government have not gone as far as the majority of the Committee. As the hon. Member for Mansfield pointed out, a minority dissented.

Mr. Taylor: Mr. Taylor rose—

Mr. Brooke: I am sorry, I cannot give way.
The trade union members expressed, as they had a perfect right to do, a preference for a different formula. Even the formula put forward in the Phillips Report by the two dissentient members would call for higher contributions than the contribution proposed in the Bill.

Mr. Taylor: Mr. Taylor rose—

Mr. Brooke: No. In the Bill the benefits are being increased, as the Minister said, by over 20 per cent. If the contribution were increased proportionately it would not be 6s. 9d. but 7s. Under the 1946 Act the main pension rate was 26s. and a man's contribution was 4s. 11d. The benefits compared with the 1946 Act are being increased by over 50 per cent. If the contribution increased in the same proportion as the benefit, it would not be 6s. 9d. but over 7s. 6d.
The important question is: Is the contribution proposed too high for the ordinary man to afford? If the contribution were increased in proportion to the average increase in earnings since 1946, it would not be 6s. 9d. but 8s. 1d. Which-


ever way one looks at it, the Exchequer is paying not only its full share, but more.
The right hon. Lady called on the Government to reconsider their proposals and bring in a much bigger Measure next year. Mark those words—a much bigger Measure. At present the capital liability of the Exchequer under existing legislation is £13,200 million. Under the Bill it will rise by a further £2,500 million to £15,700 million. That is going to require a gigantic effort to pay, but it is well worth while and we on this side believe that it can be carried.
The Opposition say it is not enough. If there were no increase in contributions at all, as some people seem to wish, the capital liability would go up by a further £3,000 million. It would be £18,700 million against which there is only £1,400 million in the Fund.
Is this the way to guarantee that the money will be there to pay the pensions, and is not that the most important decision that the House has to take? Let us be entirely sure that in the ultimate end our power to pay the much better pensions will depend on the continuance of British prosperity and the expansion of our industry and trade.
These things do not happen of themselves. They depend on our taking wise decisions and holding to those decisions. They depend on our making absolutely certain that as a nation we can continue to pay our way.

Debate adjourned.—[Mr. Legh.]

Debate to be resumed Tomorrow.

NYASALAND (DEVELOPMENT)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh.]

9.59 p.m.

Mrs. Eirene White: The half-hour allotted to this debate is not long enough to do more than touch upon a few of the problems which could be included under the heading of development in Nyasaland. I had the pleasure of visiting that very beautiful country this summer. My visit was a brief one, but I went not entirely unprepared. Since I came back—

It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh.]

Mrs. White: —I have had the opportunity to check my information with more knowledgeable people here at home.
When I was there I had the chance of listening to the views of a great many people, both official and unofficial—Africans, Europeans, and Asians—and I should like to take this opportunity of expressing my thanks, especially to many Government officials who were extremely kind and most helpful, from the Acting Governor downwards, and also to the leaders of the African organisation in Blantyre and Limbe who came to meet me.
The standard of administration in Nyasaland is equal to that in any British Colonial Territory, but I was disturbed to find that a number of vacancies existed, especially in the administrative service in the field. I should like to ask the Minister if he can comment upon this position. I do not need to remind him that there are other examples of Colonial Territories where quite serious consequences have ensued because there have been too few officers in close touch with the people in their day-to-day life.
When I asked a Question upon this matter a fortnight ago I was told that there were then 18 vacancies in the administrative staff, which, for a territory of the size of Nyasaland, is a serious matter. I hope that the recruitment for


these vacancies will be expedited, more especially as at this time some of the most senior officers in the service in Nyasaland are retiring, or shortly will be. Nyasaland is in a transition stage and, perhaps, a rather self-conscious one, owing to the impact of federation.
I now turn to political matters. On the constitutional side, the burning question for all politically-conscious Nyasalanders is the manner in which the undertaking given on 24th May by Mr. Lyttelton, as he then was, upon the representation of Africans, is to be implemented. My hon. Friend the Member for Rugby (Mr. J. Johnson) wishes to say something about that matter, so I shall leave that for the moment, simply saying that I very much hope that the time has now come when we may have a definite statement from the Government, for which we have now been waiting for some time. If no definite statement is made shortly, there will be considerable disappointment in Nyasaland.
As time is short, I propose to go no further into the political aspects of development, but to mention another undertaking of Lord Chandos upon which I think we should also have a progress report, namely, the question of land purchase. Negotiations for the purchase of the remainder of the estate land in the Southern Province have now been going on for some time. It is three months since I was in Nyasaland and I was then told, not merely by Africans but also by people in the Administration, that they were extremely anxious that there should be no unnecessary delay in coming to a conclusion on this matter.
It has been suggested that the protracted negotiations are due to some necessity to have regard to the susceptibilities of British shareholders in the companies concerned. All I can say is that I only wish that some of those shareholders could have been with me in the Southern Province and seen for themselves the contrast between the land which is already under Government control and some of the land on the estates.
Upon land which I saw, which was being supervised by the agricultural officers, soil erosion measures were being taken most energetically, by means of terracing and so forth, and it seemed that a really first-class job was being done by co-operation between the agricultural

officers and the local inhabitants. By contrast, when one went to the estates and saw some of the land there, which is the land in question—and, of course, it is understood that that is not the land under plantation crops, but the land settled very thickly by African families—to my mind, there was a display of neglect and even of squalor.
It seemed to me that the sooner that that land, which I myself saw—and I was told that it was a fair sample—is brought under the Administration, and the cooperation of the people there is secured in order to improve it, the better it will be. I very much hope that the Minister is in a position to give some indication that the negotiations for the purchase of this land are nearing a conclusion. I am quite sure that if people in this country who feel that their financial interests were affected could see for themselves, they really would not haggle over the last shilling per acre.
There is another but smaller land question in the Northern Province concerning the mission land which has been offered to the Government on certain conditions. Again, the negotiations have been going on for quite a while, and I hope the Minister can give us some indication of what stage has now been reached. The missions are asking that this land should be treated as African trust land, but the Government have other views. My own opinion is that, in the Northern Province—and I stress that, because conditions in the south are somewhat different—the conditions suggested by the missions are sound and valid, and the only ones on which I believe we shall secure the concurrence of the local population. I therefore hope that these negotiations are also nearing fruition.
If I may turn to another aspect of the economic development of the country, concerning the Shire River scheme, I know quite well that the Colonial Secretary has no direct responsibility for this scheme, because it is a Federal subject. On the other hand, he has a direct and very serious responsibility for the wellbeing of Nyasaland, and this scheme is of such paramount importance for the future development of the country that I hope very much that, if the report of the consulting engineers, which I understand is now officially available, is favourable, Her Majesty's Government in this country


will seriously consider doing what they can to expedite it.
Although they have no primary responsibility for a Federal matter, they are nevertheless in a position to offer financial assistance through United Kingdom funds. I hope that they will look at this scheme most seriously, and will feel able to make some offer of future assistance, because otherwise, if it is left solely to Federal resources, it is bound to take its place in the queue. It is not merely a hydro-electric scheme, but also includes irrigation, flood control and a measure of control over the level of the lake which will make a very useful contribution towards better transport facilities on the lake.
Altogether, it is the type of scheme of multiple benefit which is really so important that it will be worth while making a positive gesture to expedite it, if that can be done from this country. I know that African opinion in Nyasaland is very much on the alert concerning this matter, and I think that, possibly, apart from the constitutional matters, no single act could give greater confidence or better sustain the moderate element in Nyasaland than some gesture from this country towards this scheme.
I wish to say a word about another aspect of economic development, namely, the technical education of the Africans in Nyasaland which would enable them to play a greater part in their own economic development. I am encouraged to do this by passages in the latest Report of the Department of Labour in Nyasaland, in which it is stated categorically:
There is a severe shortage of artisans and craftsmen, coupled with a growing demand for technical education. The shortage, particularly of competent carpenters and builders, has been a check upon development. Artisan training facilities have for long been recognised as inadequate.
The Report then goes on to refer to the two schemes for technical training which have already been embarked upon. Of course, one very much welcomes both those schemes for what they are worth. Frankly, they do not seem to me to go very far. The output at one school, according to the statement, would be about 15 per annum, and of the other, ultimately, 24 per annum. That is not going to create an industrial revolution in Nyasaland.
I am well aware that an adequate basis of primary education has not yet been achieved to enable the wider schemes which one would like to see to be carried out in the immediate future. I hope that emphasis will be laid upon teacher training, in particular at the primary stage. It is not a question of more extensive primary education, but of improving the quality of the schools already in existence, partly, of course, for reasons of technical education, and, partly, to enable students from Nyasaland to qualify for entry into the new university at Salisbury, which otherwise they would be quite unable to do.
Another important point is the need to have objective standards of trade testing. If the City and Guilds project for an overseas certificate goes through, as I trust it will, I hope that Nyasaland will be one of the first countries to adopt that method of objective testing. That is very necessary because Nyasaland is part of the Federation, in the other two countries of which there is an industrial colour bar. Therefore, it is essential that Nyasaland workmen should know that they can look the world in the face because they have a standard which is recognised.
Time, unfortunately, will not permit me to go into other matters with which I should very much like to deal tonight, because I want to leave the Minister ample time in which to reply to the points I have raised. Much as I enjoyed my brief visit to Nyasaland, I came away with possibly even more question marks than when I went. It is a country of which most people who have been there become extremely fond. The people are intelligent and enterprising, and they deserve every chance.
They are in a very uneasy partnership in the Federation. They were reluctant members of the Federation, and when one hears of the way in which Nyasaland is referred to in both Rhodesias, in Southern Rhodesia in particular, one can perfectly appreciate their apprehensions. It seems to me that we in this House still have residual responsibilities, and I very much hope that we shall do our best, on the lines which I have suggested, to take positive action to meet those responsibilities.

10.10 p.m.

Mr. James Johnson: I merely rise to make one point, but before doing so I wish to echo all that has been said by my hon. Friend the Member for Flint, East (Mrs. White) about economic development. When one lands at the airport at Chileka, one finds in that southern area a lack of fuel and a shortage of housing and of land. I would plead for some serious economic planning in the South. They are quiet there now, but I believe that the Africans are only waiting until the Governor has made his statement of future changes after visiting the United Kingdom and talking with the Secretary of State for the Colonies.
I believe that the time has come to give the Africans the franchise, with popular election to the Legislative Council. If I may, I should like to suggest some tests of eligibility to vote upon which the Minister might perhaps comment. I have in mind such tests as an educational test to standard 6, or perhaps an income test of £80 a year or, for those who are illiterate, consideration might be given to nominating those of standing and responsibility in, of course, African society.
If we could go one stage further, I would also plead for parity of representation on the Legislative Council. I would suggest six African members as opposed to or alongside the six European and Asian members combined. That is fearfully important because, as the hon. Lady the Member for Flint, East has said, Nyasaland is the poor neighbour to the two Rhodesias and this principle of parity is important psychologically. The Africans themselves set great store by it, and if we are to hold them, and have them working and co-operating within the Federation, we shall need to do such things as these to secure them as willing partners in this great multi-racial experiment in Central Africa.

10.16 p.m.

The Minister of State for Colonial Affairs (Mr. Henry Hopkinson): The hon. Lady the Member for Flint, East (Mrs. White) has covered a very wide field, but was kind enough to give me a note of some of her points, which I shall now endeavour to answer.
Like all visitors to Nyasaland, she has obviously fallen under its spell. I sympathise with all that she has said about endeavours to improve conditions in that lovely country. Her first point related to staffing problems, vacancies amongst administrative officers, and so on. In reply to a Parliamentary Question, I told her, on 17th November, what vacancies were outstanding and what the prospects were of filling them.
To that reply I can really only add that every effort is made, by means of notice board advertisements, etc., to find suitable candidates. I think that, with the number of retirements from the Sudan political and administrative services, as well as from the technical service, which are now going on, we might possibly find some useful applicants in that field, which those of us who know the Sudan service have always so much admired.
Both hon. Members referred to the constitutional advance of Nyasaland. The former Secretary of State, now Lord Chandos, reported to this House on the various proposals which he had discussed with representatives of the different communities in Nyasaland. He said, I think on 24th May last, that he hoped by the end of this year to be able to lay before the House definite proposals. I am not sure that we shall be able to carry out that time-table exactly, but the Governor is in the final stages of discussions on constitutional advance in Nyasaland, and we are just as anxious as hon. Members opposite that those proposals should be laid before the House, and enacted as quickly as possible.
I do not think I can comment tonight on the proposals and suggestions of the hon. Member for Rugby (Mr. J. Johnson)—they form part of the whole question of constitutional advance—but I shall certainly note them, and see that they are communicated to the Governor.
The hon. Lady went into some detail on the question of land, and, in particular, the system of tenantry on private estates known as the Tangata system. I do not entirely agree with her. Though I am sure she did not mean to do so, she appeared to suggest that on all private estates there were conditions of neglect and squalor. I am sure that she will agree that that is not generally the case, although there are certain parts of


the estates which are in a bad condition, and where some improvement is needed.
At this time, the Government of Nyasaland are negotiating with the owners of some of the larger estates, with a view to acquiring land which is closely occupied by African tenants, or else which is not scheduled for development within a reasonable period. I suggest that these negotiations ought not to be carried out in too much of a hurry because, first of all, they depend on the question of the survey of the land concerned.
I also think it is important that the actual taking over of the land in due course should be done on a basis which will encourage and not discourage sound development. My right hon. Friend has, therefore, authorised discussions with the representatives of the estates so that we can find the best approach to this problem. That would seem to be on the basis of development plans to be drawn up by each estate, so that one may vary from another.
We believe that, on the basis of these plans, the owners of the estates will be prepared to take all reasonable and practicable steps to divest themselves of land which, through settlement or for some other reason, is no longer essential to their needs, and will also be prepared to develop the rest of the land which they are to retain in the best possible manner.

Mr. J. Johnson: Will the right bon. Gentleman assure the House, in view of the fuel shortage and the extensive soil erosion, that he will bear in mind and bring to the attention of those concerned the need for a careful afforestation policy?

Mr. Hopkinson: I will make a note of that point, although I have no time to deal with it tonight.
I should like to make another comment on this question of land. It may be that on certain estates there are parts from which, although they are not densely inhabited as some of the others are, it may be possible to resettle tenants on adjoining trust land. Elsewhere, possibly in the majority of cases, where trust land or parts of newly acquired land are not so situated as to make this practicable, it may be possible to approach this

problem by co-operation with estate owners and with the tenants, and to reorganise the existing layout of the estates.
For example, there may be estates where tenant settlement is not unduly heavy and yet it is, in fact, impeding development. In those cases, one can often arrange for the estate owner to reorganise his land and set aside compact areas for African occupation which could then be scheduled for acquisition by Government. By explaining the matter carefully to the Africans beforehand, we believe that we can obtain their co-operation, and make them realise that in those cases it is in their own interest to move.
All these matters, I can assure the hon. Lady, are being considered very carefully. I believe that the good will of the owners is present, and that we shall achieve satisfactory results. I am sure that this procedure, even though it may take a little longer, will in the long run be the best way of getting rid of this Tangata system on one estate after another.
The hon. Lady referred to the mission lands. My understanding is that, in general, the Africans living on mission lands are not dissatisfied with their lot. They are, in fact, in very much the same position as Africans living on trust land. Certainly in the Southern Province there is very little mission land. As for the North, I do not remember, when I was in Nyasaland, that there was any particular grievance on the part of Africans living there.

Mrs. White: I do not suggest that there is any grievance on the part of the Africans. What I am suggesting is that the Church of Scotland Mission, in particular, has offered a fairly substantial area of land to the Government, and wants to know what the situation is. Naturally the people living on the land would also like to know what the situation is.

Mr. Hopkinson: I visited the Church of Scotland Mission at Livingstonia when I was there myself, and I think I can say this. I feel quite sure that the Nyasaland Government will acquire any land that any mission, Church of Scotland or otherwise, will offer to it at a reasonable price. Sometimes that comes into it.
The hon. Lady referred to the Shire Valley project. That is a matter for the Federal Government. She made certain suggestions, which I will take note of and pass on to my right hon. Friend. I am afraid I cannot say any more this evening.
I should like to make a general observation in regard to Nyasaland about something which I myself expected when I was out there in 1952 seeking to explain the objects and aims of federation to the Africans, and that was that federation would certainly be of great material benefit to Nyasaland. That has proved to be the case. For the first time Nyasaland is now on a relatively sound financial footing, which is reflected in the fact that last year's Budget deficit of £200,000—we must remember that it is a small and poor Colony—has been turned into an estimated surplus of £20,000 for the current financial year in spite of very greatly increased territorial expenditure and a total public works programme of some £2½ million, which is quite unprecedented in the history of the territory. Federal public works include such items as the big hospital at Blantyre costing £750,000 and will give concrete demonstration of the benefits which federation has brought with it.

Mr. J. Johnson: And cheaper cigarettes, too.

Mr. Hopkinson: And cheaper cigarettes.
I think federation has brought with it the prospect of very great improvement in African education in Nyasaland, to which the hon. Lady referred. In the past, education in that Territory has been handicapped in many ways, but above all by a lack of funds and a shortage of teachers. I think recent developments will do very much to overcome these long-standing obstacles.
The steps taken last year to improve the salaries and the status in the teaching service ought to produce more

recruits of good quality for this most important work. The new five-year plan for the improvement of African primary and post-primary education has been published. This will provide for an increase in the annual enrolment from 86,000 in 1953 to 130,000 by the end of the five-year plan. There is also provision for a very substantial increase in the number of teachers in training. I know that that is also one of the points which interested the hon. Lady.
She is also interested in secondary and technical education. The Government secondary school at Dedza, about which the hon. Gentleman the Member for Rugby questioned me during our debate about six months ago, has got off to a good start. It has all the makings now of a first-class school which runs both academic and technical courses, and it is well equipped for technical instruction.
It has a first-class staff. By the end of last year it had a total enrolment of 105, and as a result of a visit which has been paid by one of the Secretary of State's advisers, we hope to double the intake. I have not time to go into that in any further detail tonight. I should just like to assure the hon. Lady that this matter of technical education is under very careful examination, both in the Colonial Office and in the Territory itself.
I conclude by saying that as far as Nyasaland is concerned, we believe instead of having been the Cinderella of that part of Africa it is now well on the way to improving its condition, and that in future we can look forward, given reasonable prosperity, to a very great improvement in the standards of living and in the conditions generally in the Protectorate.

Question put and agreed to.

Adjourned accordingly at Twenty-nine Minutes past Ten o'Clock.